When to Update Your Estate Plan
As the protagonist of a 1986 teen comedy film once said, “Life moves pretty fast.” This observation is particularly relevant in the estate planning context, as life’s ups and downs can cause established estate plans to quickly become outdated and no longer serve their intended purpose. Effective estate plans are best thought of as works in progress that are reviewed and updated whenever certain events occur in a person’s life. A Springfield estate planning attorney can help you determine when an estate plan update might be right for you.
You Buy a House
For most people, their home is the most valuable asset they own. As such, it should be given special consideration in any estate plan. When you die, you want to ensure that your descendants can not only keep the house but afford to continue living in it and maintaining it properly. There are several ways you can ensure that your house passes to your intended heirs, such as:
- Bequeathing it to an heir through a last will and testament
- Transferring the house into a revocable trust
- Using a transfer-on-death deed (also known as a “beneficiary deed”) to transfer the house to the named beneficiary upon your death
- If you are married, purchasing the home as tenants by the entirety with your spouse
You Start a Business
Houses typically are the most valuable assets individuals own, but businesses can be equally, if not more, valuable — and far more complex. When you start a business, you need to determine what will happen to your interest in the business when you die and make a business succession plan for your death, retirement, or incapacitation. If you are the co-owner of a business, you should consider executing a buy-sell agreement to establish a fair value for your share in the business and clear any potential confusion over how your share will be transferred.
You Move to a Different State
The basic tenets of estate planning vary little from state to state, but you should nonetheless ensure that your estate plan complies with all relevant laws in the new jurisdiction if you move to a different state. For example, many state laws differ on the finer points of the following elements of estate planning:
- The valid execution of estate planning documents
- The rules of intestate succession
- Statutory rights of disinherited or omitted spouses and children
- Assets that comprise the probate estate
- Estate taxes
Failing to check your estate plan against the laws of your new state can result in your estate being distributed contrary to your wishes. If you are new to Missouri and would like a comprehensive review of your existing estate plan, please contact a Springfield estate planning attorney.
There Are Changes in Your Family Composition
One of the most common and obvious times to update your estate planning documents is when there are major changes to your family composition. This can occur when:
- You get married: When you get married, you will likely want to update your estate plan to take your new spouse into account, particularly if you have children from a previous marriage
- You have children: Similarly, you also will likely want to update your estate plan when you have children to make provisions for their futures
- You get divorced: Missouri law provides for the automatic revocation of bequests to ex-spouses upon the finalization of the spouses’ divorce. If you do not want that to happen or would like to make a different bequest to an ex-spouse, you will need to update your estate planning documents.
You may also use your last will and testament to name a legal guardian for your children should you and your spouse both die before they reach the age of 18.
There Are Changes to Your Assets or Liabilities
Most individuals draft their estate plans with a certain set of assumptions about their finances. If circumstances change such that those assumptions no longer hold true, you should consider updating your estate plan to take those changes into account. For example, if the value of your estate increases significantly, you may want to name additional heirs and beneficiaries or incorporate charitable giving into your estate plan. If the value of your estate decreases significantly, you may want to limit your heirs and beneficiaries to your immediate family. A Springfield estate planning attorney can help you determine the financial circumstances that may necessitate such changes.
There Are Changes to Your Relationships
Changes to your family composition are good indicators that it’s time to update your estate plan, but so are changes in the nature of your relationships with your heirs, beneficiaries, and others associated with your estate plan. Some of those relationship changes could include:
- The death of an heir or beneficiary
- The designation of an additional heir or beneficiary
- Involvement with a charitable organization to whom you would like to make a gift
- Changes of circumstances with respect to your relationships with the executor of your will, your trustee, or your attorney in fact
There Are Changes to Your Health
If you do not already have an estate plan, significant changes to your health — such as a diagnosis of a progressive or terminal illness — may indicate that you should prepare one. Estate plans may also be used for objectives other than determining what happens to your property when you die, such as what will happen to you should you become incapacitated. A power of attorney executed before you become incapacitated allows you to name a person to make medical decisions on your behalf and specify the details of your end-of-life decisions.
Update Your Estate Plan With Help From a Springfield Estate Planning Attorney
If you have an estate plan but are anticipating significant changes in your finances, personal relationships, or health, you should consider updating it to ensure that it continues to serve your needs. To get started, please contact a Springfield estate planning attorney at LifeGen Law Group by calling 417-823-9898 or using our online contact form.