Your life situation is always changing. So too is the life situation for your family members. Many of these changes may impact how well your estate plan works. In short, your estate plan slowly becomes obsolete because life makes it so. Some life changes that require a change to your estate plan include (but there are more than just these): marriage, the birth or adoption of a new family member, divorce, the death of a loved one, a significant change in assets, and a move to a new state or country.
Life Events that Impact Your Estate Plan
Marriage is an exciting time. Estate planning is therefore often at the back of the list, or off the list at all, of things to do after marriage. However, getting married is an important time to edit your estate plan because there is a new relationship formed. You may want to provide for your new spouse in a certain way, you may want to change your life insurance beneficiaries, or you may want to make sure your own children are taken care of down the road. If you are in a blended family situation, doing a comprehensive review of your estate plan is vital to making sure your assets do what you want them to do in the future.
Birth or adoption of children or grandchildren
A baby changes everything, and it should change your estate plan. Your estate plan may not automatically include a new child, or you may not have provisions for how to treat a new child. And as your child ages, how you want to treat them will probably change, such as when they enter high school or college. These principles apply just as much to a grandchild and a child.
Colorado law updates your estate plan after you get divorced, striking your ex-spouse as beneficiary and all trusted positions. However, your life insurance policies, retirement accounts, and other similar assets do not get updated automatically. Minimally, you should make these changes, but you may also want to review your estate plan as a whole to make sure that nothing gets lost in the transition.
The death of a loved one
Ultimately, we all pass away. This may happen to someone you named as a beneficiary of your estate plan or someone you trusted for a certain role, such as guardian of your children. You may want to put in a new beneficiary, but it is imperative that you name someone to fill a vacant role in your estate plan.
Significant change in assets
If you have an increase is wealth, whether from a salary increase, inheritance, winning the lottery, or some other event, you may want to review your estate plan. The larger the inheritance from you, the greater the chance that your heirs will fight over it. It is worth reviewing your estate plan to ensure that everything is set up in a way to prevent these fights. If you have had a sudden decrease in wealth, you may want to re-allocate where your assets go, so you should get a review in that situation as well.
A move to a new state or country
Estate planning law vary from state to state. If you move to a new state, you should get a review of your documents to make sure they comply with your new states’ laws. Moving outside the United States is an even more complicated scenario, and you must get professional legal help in that situation It is always good to regularly review your estate plan with an attorney to protect yourself and your family after a move or large life changes.