5 Reasons to Update Your Estate Plan
What is Estate Planning?
Making an estate plan is an excellent way to ensure that the people you love will be taken care of after you pass on. Most people think of making a will when considering estate planning, which is an important aspect of the practice. But in some cases, you may also want to set up a trust or transfer property while you’re still alive. You may also want to make decisions about your future medical care. Your attorney will ask about your plans and wishes and advise you on the options for achieving your estate planning goals.
Once you’ve made a list of assets, decided how you want them distributed, worked with a lawyer to document your wishes in a will, then signed it, you will probably be relieved to have finished the task. But in some situations, it’s a good idea to revisit your estate plan and make changes to coincide with how your life has evolved in the meantime.
The Van Dyck Law Group is an estate planning firm dedicated to serving your needs, including wills, trusts, and long-term care plans. We’re always available for a consultation and are happy to help explain the different options available to you. Please contact us if you have any questions about updating or creating an estate plan.
Do You Need to Update Your Estate Plan?
In many cases, the answer is yes. Here are five reasons you might need to update your estate plan:
If You Have Moved to a Different State
States all have their own laws about estate planning, and the attorney who helped draft your will did so with the laws of their state in mind. In particular, each state has tax laws that may affect a person’s inheritance, and an estate planning lawyer is often asked for suggestions on how to minimize the tax burden on a client’s heirs. What your lawyer included in your estate planning documents to help you with this goal in a previous state may not work now that you live in New Jersey.
When making your will, you may also have chosen an executor who now lives far away and would find it difficult to travel multiple times to help settle your estate. If this is the case, you might consider choosing a new executor. Having your will and other documents reviewed by a New Jersey estate planning attorney will reveal any areas you now need to update.
When You Get Married
Sometimes people assume their spouse will automatically inherit their whole estate if they pass away, so they don’t need to write or update an existing will. However, this is not true in the state of New Jersey. Here your spouse may receive some or all of your estate depending on whether you have children with them or another partner, and certain other relationships. Writing a will specific to these state laws will allow you to decide if you want your spouse to get the full estate or to distribute it differently.
When You Have Children
Once you have a child, updating your estate plan is important to ensure you’ve made all the appropriate decisions regarding their care. Aside from leaving them specific assets or setting up a trust, you will need to name a guardian for the child if you and their other parent have passed or cannot take care of them. If a guardian isn’t named in your current will, the state will choose one, usually a relative. This may not be the person you would have chosen, so you must update your estate plan to make your wishes known.
We recommend making a list of 2-4 people you are close to who you believe would be good guardians for your children. Then you should speak with them and ask how they feel about taking on this considerable responsibility if you and your spouse should pass on before your kids are adults. You don’t want your child’s potential guardian to be surprised by your plans after your death. Sometimes, a potential guardian can’t or won’t accept the role of parenting your child, and you may need to move on to the next person on the list.
If You’ve Gotten Divorced or Your Spouse Has Died
In these situations, you may need to take another look at your current plan and make some adjustments, especially if your previous will was mostly focused on leaving the bulk of your estate to your spouse. This goes beyond just the contents of your will – often, people designate their spouse for a wide variety of duties, such as power of attorney, healthcare proxy, or executor of the estate. You may also have made your spouse the beneficiary of a life insurance policy or a trust, or included them on a bank or retirement account that is payable on death. These situations may also require updating multiple documents that your attorney will help you sort out.
When You’ve Simply Had a Change of Heart
Sometimes people change their minds about how they want their assets distributed after their death. You may have considered someone your best friend in your 20s, but now you haven’t spoken with them in years. Maybe some of your relatives have had a shift in their own financial situation, and you realize they no longer need your support, but another family member might. You may have made new friends you want to include, or decided to add a gift to a nonprofit. If you’re no longer comfortable with your current estate plan, speak with an attorney about updating it to better reflect your wishes.
How Often Should I Update My Estate Plan?
We recommend reviewing your estate plan regularly. Some people choose to do this on an annual or even semi-annual basis, especially if they have a large estate where assets frequently change hands. Others may be comfortable going over their plan every three or even five years, particularly if their financial situation and major assets don’t change often. However, any time you’ve experienced one of the life changes listed above, it’s a good time to make an appointment with your estate planning lawyer and take another look at your plan.
Have questions or concerns about your estate plan? Van Dyck Law Group is always available for a consultation to answer your questions. Please contact us today at 609-580-1044 or visit us online to learn more.