This is an article from The Mendel Law Firm (mendellawfirm.com/) in Houston, Texas, that we thought others may find helpful.
If you have taken the time and effort to create a comprehensive estate plan you are to be congratulated. Over half of all Americans have yet to create an estate plan despite understanding the importance of doing so. Don’t stop now though! Creating your estate plan is only the first step to ensuring that you, your assets, and your loved ones are protected now and in the future. The next step is to review and revise that plan on a regular basis or when life events call for an update.
Although there is no universal time period for reviewing and updating your estate plan, most people should do so every five years or so. Many things can change in five years, some of which warrant a change to your estate plan. In addition to conducting a regular review, you should update your estate plan when certain life events occur, including:
- Marriage – your own marriage or sometimes the marriage of a beneficiary, warrants a change to your estate plan to include the new spouse – or specifically to exclude the spouse if that is your intention.
- Divorce – as soon as you decide to divorce you should consult with your estate planning attorney. All too often an estranged spouse ends up inheriting a fortune or being the beneficiary of a substantial life insurance policy because of the failure to update an estate plan.
- Birth or adoption – although your plan may account for “future born” beneficiaries, it is always best to include them by name when they actually arrive.
- Death – the death of a beneficiary can dramatically change your estate plan. If a major beneficiary dies, take the time to sit down with your estate planning attorney and review your plan and incorporate any updates.
- Move – if you move to another state you should always review your estate plan because estate planning laws can differ from one state to the next.
- Major change in assets – if you buy or sale a major asset, such as real property, you should update your plan to reflect the change in assets.
By taking the time to review and update your estate plan you can rest assured that the plan will function as intended when the time comes for it to take effect.