Your estate plan is an incredible tool: it helps you keep control of your property while still protecting you and your loved ones if you ever become incapacitated. It helps you take care of your loved ones and pets. And, if carefully designed and drafted, it administers your estate after your passing in a more efficient and cost-effective way by reducing attorneys’ fees, court costs, taxes, stress, and time wasted. Your estate plan can even keep your family and financial affairs private and protected from public knowledge. But one thing your estate plan cannot do is update itself.
No, your estate plan cannot update itself, and can only reflect your situation at the specific point in time in which you created it. While your estate plan is flexible, the simple fact is that our lives and the law are always changing and unfolding in unanticipated ways. Your plan needs to reflect those changes to reflect your wishes. If it does not, your estate plan will be as stale as last week’s ham sandwich and will fail in its purpose.
If anything in the following five categories has occurred in your life since you signed your estate planning documents, contact me to schedule a meeting. I will help you keep you and your loved ones protected.
5 Life Changes that Require a Change in Your Estate Plan
1. Marriage, Divorce, Death.
Marriage, divorce, death, and remarriage all demand sizable changes to an estate plan. A spouse has such integral roles in our lives. An estate plan does not automatically change when one of these events happen. You and I would need to re-evaluate trustees, successor trustees, beneficiaries, personal representatives, and agents under powers of attorney to make sure that you have the desired individuals serving in these capacities.
2. Change in Financial Status.
A positive or negative substantial change in your financial status may require you to update your estate plan. Some of these changes may include the starting or selling of a business; success with your business or career; filing for bankruptcy; suffering a medical crisis with resulting medical bills; retiring; or receiving an inheritance from a deceased relative.
3. Birth, Adoption, or Death of a Child / Grandchild.
The birth or adoption of a child or grandchild may lead you to want to create gifting trusts, gifting plans, 529 education plans, or UGMA/UTMA (Uniform Gifts to Minors Act / Uniform Transfers to Minors Act) accounts. You and I would need to re-evaluate trustees, successor trustees, beneficiaries, personal representatives, and agents under powers of attorney to make sure that you have the desired individuals serving in these capacities.
4. Change in Circumstances.
Your circumstances will eventually change. It is simply how life is. Common examples include:
- Children and grandchildren become adults and are now ready to be trusted helpers in your estate plan;
- Relationships change and you need to name different individuals in your estate plan to serve as agents, trustees, or other positions;
- Beneficiaries or trusted helpers (agents, Trustees, guardians, etc.) develop poor habits, such as overspending, gambling, or drug habits;
- Trustees, agents, guardians, or personal representatives are no longer able or no longer wish to serve in the roles to which you had appointed them;
- Your beneficiaries become disabled and need a special needs trust in order to qualify for government disability aid;
- Guardians for minor children move out of the state, divorce, pass away, or for other reasons, are no longer the best individuals to serve.
5. Changes in Venue.
State’s laws are different from each other, and moving from Colorado to another state deserves a review of your estate plan. You may need to make changes to your estate plan to make sure that you are taking advantage of your new state’s laws while not being punished by those same laws. This same principle applies if you ever purchase a second property outside of Colorado.
You Created Your Estate Plan to Help, Not Hurt, You
Your estate plan will eventually not reflect your wishes and become stale. You would not rely on last week’s ham sandwich for lunch, so please do not rely on your old estate plan that no longer helps you. If you have experienced any of these changes mentioned above, contact me and set up an appointment. You and I will review your estate plan together to make sure you and your loved ones are protected.