Estate planning does not last forever in many cases. If you do it well before you need it, don’t assume that the plan will stand the test of time. It may need to get updated. The truth is that life changes, sometimes dramatically, and your plan needs to change as well.
Identifying when you need to make those updates is important. Some people just do it once a year to make sure they’re covered. Others look for key events that mean it’s time for an update. Three such events include:
- Getting divorced and/or getting remarried. With this type of life change, you absolutely need to update your paperwork and consider whether or not your ex still has a right to some of your estate.
- Moving to a different state. The estate planning laws are not the same in every state. If you made your original plan in California and then moved to Virginia, for example, you want to go over it to make sure it still works here.
- Seeing a substantial shift in your liabilities or your assets. Maybe you took out new loans to start your own business, so you want to plan for that debt. Maybe you sold a business to retire, and now you have substantially more money and no need for a succession plan. When there’s any major change to your debt or what you own, you need to update the plan.
These are just three reasons, and they’re certainly not all of the ones you may encounter. Make sure you know exactly what legal steps to take and when to take them.
