Some people treat estate planning like a slow cooker. They want to set it and forget it, as the saying goes. It is common for adults to incorrectly assume that an estate plan they created years ago offers them adequate protection.
The reality is that the passage of time can lead to estate planning documents becoming outdated and possibly even unenforceable. Popular guidelines recommend that people review their estate plans every few years and also after certain significant life events, including the following.
Changes in health
For many people, an estate plan is a way for them to protect their loved ones should an emergency occur. Many people establish estate plans after marrying or having children to provide for their dependents. Their plans reflect a theoretical future scenario that may not seem like a current concern for the testator. When someone’s health suddenly changes, their feelings about their legacy and the support needs of their family may change as well. They may worry about dying with medical debt or about becoming incapacitated. Extensive revisions to estate planning documents are often necessary after medical professionals diagnose someone with a chronic, progressive or terminal medical condition.
Changes in a family
Family units constantly evolve as time passes. Parents have multiple children over several years. Couples get divorced. Divorced and widowed adults remarry. Adding new family members, losing a loved one or changing one’s marital status are all reasons to update estate planning paperwork.
Changes in financial circumstances
An estate plan often includes instructions for the distribution of assets. It may also include plans to address personal debt. If someone moves to a new house, they may need to update their estate plan to assets in their possession and eliminate reference to the old property. If someone acquires or sells off a small business, that may also require an update to an estate plan. If someone’s financial circumstances change substantially, what they require from an estate plan is likely to change as well.
Recognizing when it may be time to update estate planning documents can give people peace of mind. Those who occasionally review and revise their paperwork can better protect themselves and their loved ones from certain difficult situations.