You hear all of the time that you should update your estate plan, but what situations require you to update it and what can wait? If you’re not sure, consider these top five reasons estate planning attorneys recommend updating your estate plan:
- Marital Status Changes – If you have gotten married or divorced, you need to update your estate plan. Your beneficiaries could change and your fiduciary selections may also change.
- Financial Status Changes – Consider how it would be if you won the lottery, but you didn’t update your estate plan. Where would that money go? If it’s not in your estate plan, the courts will have to decide who inherits that money and your estate may even owe estate tax. Any change in financial status – losing your job, inheriting money, etc. – may require an update to your estate plan.
- New Beneficiary – If you have a baby, you need to update your estate plan right away. This is because your child is a potential beneficiary, but if he or she isn’t listed in your estate plan, the court will decide their share. The same is true when a beneficiary dies. If you have listed a beneficiary in your will who is no longer around, the courts will select the beneficiary for you.
- New Business – If you just purchased or invested in a new business, you need to include that in your estate plan. That way you can prevent your business from being sold upon your death or your business being restructured in a way you never intended.
- Moving To A New State – New homes bring a lot of new challenges, but if you have moved to a new state, you’ll need to update your estate plan. This is because your new state will have its own set of laws regarding estate plans and if yours isn’t up-to-date, it can cost your family greatly in the end.
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