It’s time to make your New Year’s resolutions, and although it may not be the most fun one, a new (or updated) estate plan is a great decision. (You know it’s been on your to-do list!) Here are eight life decisions or events that should get you thinking about updating — or creating — your estate plan right away.
1. GETTING MARRIED. Estate planning after tying the knot does not have to be complicated. Simply updating your beneficiary information and updating emergency contact information are the things that should happen right away. You should also consider preparing a will and a living will. As your marriage progresses, it may make sense to consider a revocable trust as well. Having discussions with your spouse about how you want your estate to be managed depending on different scenarios is also important.
2. GETTING DIVORCED. For many, the emotional toll and legal complexities of divorce can be overwhelming. Oftentimes estate planning is overshadowed by the divorce, resulting in unintended consequences. Making sure you make changes to your estate plan as soon as your divorce proceedings have been finalized will make sure your ex will not end up with the house, life insurance proceeds or other assets of yours. Some changes (like revocations of current financial and healthcare powers of attorney) may also be appropriate while the divorce is still pending.
3. HAVING A CHILD. A new child necessitates major revisions to your estate plan. This not only affects who will inherit your estate upon your death but will also require you deciding who will be the guardian of your children if you should die before they become adults. As your child grows and matures – and if more children are added — your estate plan will likely continue to change.
4. BUYING LIFE INSURANCE. These policies are present in virtually all estate plans and serve as a useful source of liquidity and financial support for your family or loved ones. Make sure to list all beneficiaries under the policy and make sure to update them as time passes.
5. BUYING A NEW HOME. When you purchase or refinance a home or other real estate, you should always make sure the asset is titled appropriately. If you use a trust, sometimes a lender will take a property out of a trust during a refinance. The key is to make sure your title furthers your goals.
6. STARTING A BUSINESS. If you start a business or ownership interest changes in a current business, you need to understand what impact these changes have on your estate plan. Even more, there may be tax implications that could affect your heirs without proper planning ahead of time.
7. DEATH OF A LOVED ONE. The passing away of someone listed in your will is often overlooked in estate planning. These individuals may be named guardians to your children, have an inheritance allocated to them, be designated as emergency contacts, or may be named as executors of your estate. Leaving the role vacant can have unintended consequences and necessitates transitioning new people to fill the void left behind by your loved one’s death right away.
8. MOVING TO ANOTHER STATE OR COUNTRY. When you change your residency from one state to another, you must review your estate plan to make sure it conforms with local laws. The same is true if you move to another country. Likewise, if you have property in more than one state or country, special attention must be paid to how those assets will be distributed according to your estate plan and applicable law.
Planning based on your life stages is important because your circumstances over the years will surely change. If you have any questions about estate planning — or have had to make a recent big decision in your life — contact us to learn more about your options.