Your estate plan is one of the most important legal tools you will ever create. It is designed to protect you, your loved ones, and your money and property. A well-crafted plan can reduce taxes and fees while ensuring your family is cared for. Depending on the tools you use, it can also keep your personal matters private and out of court.
However, an estate plan is not something you can “set and forget.” While it offers some flexibility, it is created at a specific moment in time. As your life changes, your plan must be updated to stay effective. If it has not kept up, it could fail when you need it most or work in ways you did not intend.
If anything in the following eight categories has changed in your life since you signed your estate planning documents, it is time to update your plan.
Marriage, Divorce, or Death.
Have you gotten married, been through a divorce, or lost a loved one? Each major life event often requires a full review of your estate plan. This ensures your money and property go to the people you want, in the way you want.
Your spouse usually holds many roles in your estate plan, such as beneficiary, trustee, executor, or agent under powers of attorney. A change in marital status or the loss of a spouse makes it essential to review and update all these appointments. Doing so ensures your plan reflects your current wishes and new family structure.
Change in Financial Status.
A major change in your financial situation—positive or negative—usually requires updating your estate plan. Financial shifts can occur when you retire, buy or sell a business, receive an inheritance, acquire or lose significant assets, or even win the lottery. Your plan should always reflect your current financial reality to protect your wealth and ensure it is distributed according to your wishes.
Birth or Adoption of a Child or Grandchild.
The birth or adoption of a child or grandchild is a joyous event—and a key time to update your estate plan. You may want to revise your plan to include continuing trusts, gifting trusts, 529 education plans, or UGMA/UTMA accounts.
If you are a parent, it is also crucial to nominate a legal guardian for your minor child(ren) in case you cannot care for them. We can help update your plan to include new family members and explore options to secure their future.
Change in Circumstances.
Life and relationships change. When they affect your estate plan, review your beneficiaries and decision-makers, including trustees and agents. Consider updates in these situations:
- Children or grandchildren reach adulthood and become eligible and capable enough to serve in trusted decision-maker roles
- A decision-maker moves away, passes away, becomes estranged, or is otherwise unable or unwilling to continue serving in their role
- A beneficiary passes away or becomes estranged
- A beneficiary or decision-maker develops issues such as overspending, substance abuse, or gambling problems
- A beneficiary becomes disabled and requires special planning tools to maintain eligibility for means-tested government benefits
- Guardians for minor children divorce, move to a new state, or are otherwise no longer suitable or willing to serve
Changes in Venue.
Moving to a new state or buying a second home requires an estate plan review. State laws differ, so your plan should align with your new location.
Outdated Powers of Attorney.
Your will only takes effect after you die, but financial and medical powers of attorney protect you while alive. They let trusted people make decisions if you cannot manage your affairs. If your documents are old, review them. Outdated forms could prevent the person you trust most from acting, whether they are a primary or a backup decision-maker. This could leave the wrong person in control or force a court to appoint a guardian, which can be costly, stressful, and public.
Unreviewed Beneficiary Designations.
Many people don’t realize retirement accounts, life insurance, and annuities bypass your will or trust. They go directly to the named beneficiaries. After major life events like marriage, divorce, or a loved one’s death, outdated designations could send money to the wrong person. Ensure all beneficiary forms are complete and filed. Missing or incorrect designations could force a court to decide who receives your funds. Regularly reviewing and updating these forms ensures your assets go where you intend.
Acquisition of Digital Assets.
Your digital footprint may be as valuable as your other accounts and property. Your estate plan should include clear instructions for how to access, manage, and transfer your digital assets such as social media accounts (especially if they generate income), email accounts, digital photos, and cryptocurrency. Failing to plan for these assets can create confusion and potential loss. Instead of leaving your digital legacy to chance, make sure that your plan reflects your online world as well as your physical one.
Estate Plans Are Created to Help You, Not Hurt You
Estate plans can age. If you have experienced any of the changes mentioned above, now is the perfect time to review your plan. Nielsen Law PLLC Provides family-focused estate and business planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area. For more information, and to learn about our firm, please contact us to learn how.
