Having a well-crafted estate plan is the best way to protect your loved ones in the future. It allows you to set aside how your hard-earned assets will be distributed and gives your family protections they would not have otherwise. But planning for the future is not something you should only do once. Instead, you should occasionally update your estate plan. Life brings numerous changes; when those changes happen, it is good to consider whether your current estate plan reaches your goals. You can choose to look at your Will, Powers of Attorney, and trust documents at any point. There are no rules or requirements in place. However, there are certain times I recommend people revisit their estate planning documents. We will look at a few of these.
You get a divorce
If you recently divorced, you may have received property in equitable distribution. This property may include retirement distributions, proceeds from the sale of a house, or the former marital residence. Depending on what you received, these assets may become part of your estate. This is a good time to consider who will receive what.
Another reason to update your estate plan after a divorce is to revisit who the beneficiaries or fiduciaries will be. Sometimes, people leave part of their estate to their ex-spouse’s family members. While this may sound strange, it happens frequently where funds are left to a niece, nephew, or stepchild. You may feel differently about these family members receiving something after a divorce though. Sometimes family members take sides in a divorce or become estranged from each other. If you no longer wish to leave them anything, you can remove them entirely from your Will.
Along with your Will, you should consider your powers of attorney. If you let your former sister in law be your agent to make medical decisions, you may not wish her to do so after a divorce.
Another time to update your estate plan is if you remarry. This is especially true if you have children. Many people write their Wills so that their spouse receives everything if they pass away. The hope is that the spouse who survives will distribute the estate to the children. This works well in many families! But it far from guaranteed in blended families. You simply have no way of knowing that your spouse will leave anything to his or her stepchildren. If you want to guarantee your children will inherit from you, it is equally important that you look at a prenuptial agreement. This will clearly define what will be “marital” property and what will simply belong to you.
Your beneficiary’s needs change
Most people in Pennsylvania leave their property to their families directly. But sometimes this may not be in a family member’s best interest. Your spouse may become disabled, or your child may develop a severe drug addiction. You may want to support these loved ones, but know that leaving them assets may not work well. That is when it is worth considering a trust so the funds will be managed properly.
Your personal values change
I focused this article on handling changes to your Will. But I cannot overlook changes to your financial and healthcare powers of attorney. With a healthcare power of attorney, someone else will make medical decisions for you when you cannot do so. This includes deciding types of treatment and making end of life decisions. As you go through life, your perspective on these issues may change. You may have not wanted life support in the past, but feel differently because you now have children. Or, you may have watched a loved one live in a vegetative state and decide you do not want to experience the same. There are no right or wrong feelings. But if your values and priorities changed, it is time to revisit your plan.
If you want to change your healthcare advance directive, you should also talk to you agent. Your agent may not support your new wishes. Updating your estate plan is the time to designate somebody else, if that happens.
As you can see, there are many times to revisit your estate plan. This is by far not an exhaustive list! But changes to your family, changes to your values, and changes to your finances are the ideal times to consider whether your original plan meets your goals. The purpose of an estate plan is to protect your family in the future. By periodically revisiting your wishes, you can ensure that they have these protections.