Many individuals believe that once their estate planning documents are in place, they can set them aside and forget about them. However, it’s not the case. Your estate plans should change as your life circumstances change. Otherwise, you risk various unintended consequences.
For example, your assets could end up with the wrong beneficiaries if you fail to update your estate plans regularly. Similarly, you may leave important decisions about your health and finances to someone you no longer trust. This can put your legacy at risk and leave your loved ones in a difficult situation when you are gone.
Important considerations when revising your estate plans
When reviewing your estate plans to ensure they are current, reflect on any significant life events since you last updated your documents. Marriage, divorce, the birth of a child or the loss of a loved one can drastically alter your intentions for your estate.
Evaluate your financial situation as well. You may have acquired new assets or liabilities over the years that you should include in your estate plan. Incorporating the changes in your finances into your estate plans can help ensure your assets are distributed according to your wishes.
It’s equally crucial to factor in any changes in tax laws that could impact your estate plans. You do not want to subject your estate to unnecessary taxes that could reduce the amount your heirs receive. Lastly, do not forget to update beneficiary designations for assets that bypass your will, such as insurance policies, retirement accounts and payable-on-death accounts.
Take informed action
Seeking qualified guidance when updating your estate plans can help you navigate the complexities involved in this undertaking and avoid costly mistakes. You can gain peace of mind knowing that you have not left anything out when updating your estate plans and the documents are legally compliant.