How Major Life Events Can Alter Your Estate Plan
Life’s Changes and Your Estate Plan
Life is full of big changes—some exciting, some unexpected—but they all have the potential to impact your estate plan. Major life events, such as getting married, experiencing significant financial changes, or moving to a different state, can alter your wishes, legal responsibilities, and asset distribution. If you don’t review and update your estate documents accordingly, state laws or outdated instructions may determine what happens to your assets. The following events are key times to reconsider your estate planning strategy.
Getting Married or Divorced
Marriage changes your legal and financial circumstances, potentially affecting how your assets are distributed. It's important to review your estate plan to ensure it reflects your new status. On the flip side, divorce requires immediate updates to prevent unintended beneficiaries from inheriting your assets. For instance, many overlook changing beneficiary designations on life insurance policies and retirement accounts, which could inadvertently benefit an ex-spouse.
Becoming a Parent
Welcoming a child into your family brings immense joy along with new responsibilities. Ensuring your children are financially protected and that guardianship designations are clear is crucial in case of an emergency. It’s wise to update your will or trust to reflect these changes.
Death of a Beneficiary or Executor
The loss of a beneficiary or executor means reviewing your estate plan to ensure your current wishes are met. This could involve appointing a new executor to manage your estate or redistributing assets among surviving beneficiaries. Regularly reviewing these plans helps avoid complicating the estate settlement process for your loved ones.
Moving to a New State
Relocating to a different state means you should revisit your estate plan as estate planning laws vary significantly. Your will, trust, or other legal documents may require adjustments to comply with your new state's laws. Consulting with an attorney in your new state will help ensure that your estate plan remains effective.
A Significant Change in Assets
Receiving an inheritance, starting a business, or experiencing financial hardship can affect your estate planning goals. These changes might necessitate adjustments in how your assets are distributed or managed. Regular check-ins with a financial advisor or estate planning expert can keep your plans aligned with your current financial situation.
Seek Professional Guidance
Navigating life’s twists and turns can be daunting, but professional estate planning guidance can help you manage these changes smoothly. Consult with an estate planning attorney to discuss your situation and ensure your estate plan reflects your current life circumstances. A proactive approach allows you to have peace of mind, knowing that your wishes will be respected, no matter where life takes you.