If you are new to the estate planning process, you should understand that updating your estate plan is absolutely essential if you want to get the most out of it. Once you speak to an estate planning lawyer, decide on the type of plan you want to create, and then go about the process of creating a plan, you might be tempted to take a break and congratulate yourself on your hard work. While you should feel proud that you have accomplished something that most people never get around to doing, you also need to be prepared to act in the future in order to make sure your plan is as good as it can be. To help you understand why updating your estate plan is so important, let’s take a look at some key factors.
Updating your estate plan is essential because your life can change.
Whether you are young, old, or anywhere in between, it’s very likely that your life will change at some point. Whether it’s the death of a spouse or loved one, a change in marital circumstances, moving to a new state or new country, or a change in your financial fortunes, you must be ready to adapt to the changes when they come. Updating your estate plan after experiencing such a change, or prior to a change you know will take place, is essential.
Your estate plan needs to reflect your current situation, but it also needs to look ahead to what the future might hold. Should your circumstances change, you have to be able to change your plan so that it accurately reflects your new circumstances.
Updating your estate plan is important because the law can change.
If you’ve created an estate plan with the assistance of an estate planning lawyer, your lawyer should keep you up to date of any significant and important changes in the law that could affect your plan.
For example, if you created your plan many years ago, there have been significant changes to how the federal government taxes the estates left behind by deceased people. In the past, the estate tax threshold was much lower than it is today, and many people created rather complicated tools to help minimize or avoid their estates having to pay the tax. Today, most of the estate plans people create don’t need to utilize these complicated estate tax avoidance methods, and can get by on much simpler, and more streamlined, tools.
Updating your estate plan is important because time marches on.
Some of your estate planning tools can be time sensitive. For example, if you have a financial power of attorney, the financial institutions with which your agent interacts on your behalf might be reluctant to accept his or her authority if the power of attorney document is more than a year or so old. Updating your estate plan on a regular basis can ensure that your plan will work as you intended it to, regardless of what happens to you.