Reviewing your estate plan is important for continuing to protect your estate, providing instructions for your own care, and ensuring that the individuals you want to benefit from your estate will do so. If too much time has passed since you reviewed your estate plan, it may no longer work to carry out your wishes. Every few years, you should update your estate plan with a Kansas City, MO, estate planning attorney so that your wishes are followed.
After certain changes in your life, an estate plan could even be legally unenforceable. Both of these situations can result in beneficiary conflict, will and trust contests, and other complex situations. In addition to regularly looking over your estate plan every 2 to 5 years, there are certain life changes that should trigger updates to your documents. These include:
Marriage
Reviewing your estate plan after a marriage or remarriage enables you to add your spouse to your estate plan, whether as a primary beneficiary, an executor, or a successor trustee. You may also want to provide your new spouse with powers of attorney. A marriage may also bring additional family members, including children, that you want to add as beneficiaries. In addition, new assets gained in the marriage may need to be added to your estate plan.
Birth, Adoption, or Familial Additions
For many individuals making an estate plan, the goal is to benefit their children and grandchildren. When there is the birth or adoption of a new child, or you have new children from your spouse’s prior relationship, you should review your estate plan. Your plan can designate guardians for children if they are minors, and trusts can hold assets for minor children until they are older.
Divorce
A divorce is one of the most significant changes in your life regarding your estate plan. Under Missouri law, after a divorce, an ex-spouse will be treated as if they had died before you did during the distribution of property. Property will then be awarded to contingent beneficiaries, whether that is what you intended or not. State laws do not address trusts and other estate planning documents. Reviewing your estate plan is essential to ensuring that the right people are in control of your estate.
A divorce also significantly alters the property you own. If your estate lists many assets that you no longer have ownership over, it could make your entire plan invalid.
Retirement
When you retire, you may have limited or no continued income, but you now have access to your retirement account. These financial changes warrant a review of your estate plan to determine what assets you have and who you want to benefit from them. If you do not have powers of attorney or medical directives in place, retirement may be the right time to create them.
Death of a Family Member
Losing a loved one can require several alterations to your estate plan. You may need to change:
- Named executors
- Successor trustees
- Heirs
- Beneficiaries
- Contingent beneficiaries
These actions and updates can protect your family and keep your assets from being subject to intestate law or probate court.
Moving to a Different State
Each state has its own tax laws, inheritance laws, and estate laws. If you have moved states, you should review your documents to ensure that they are enforceable in the new state and do not break any laws. Additionally, you may have new assets, like a home, to include in your estate plan.
Other Changes
You also want to review an estate plan for other changes, such as:
- Losing employment or obtaining a new job
- Gaining significant assets, like an inheritance
- Taking on new liabilities
- A child or grandchild becoming an adult
- Disability or long-term illness for a family member or beneficiary
FAQs
Q: How Often Should You Review Your Estate Plan?
A: Most estate planning attorneys agree that an estate plan should be reviewed every 2 to 5 years if no major changes have occurred in your life. This makes sure that your estate planning documents reflect your current wishes for beneficiaries, executors, and those who have powers of attorney. An estate plan should also be reviewed after financial changes or other life changes, such as:
- Marriages
- Divorces
- The birth or adoption of a child
- Deaths in the family
- The beginning of a new business
Q: What Are the 7 Steps in the Estate Planning Process?
A: The estate planning process varies based on your unique needs and documents, but it typically includes:
- Inventorying, identifying, and valuing the assets and debts in your estate for division
- Determining the needs of your family and/or the heirs and beneficiaries to your estate
- Ensuring that you are aware of tax laws and inheritance laws that apply to your unique estate and its value, specific to the state(s) that the property is located in
- Naming the beneficiaries and heirs to assets in your estate, along with contingent beneficiaries
- Planning for your end-of-life care through powers of attorney and medical directives
- Discussing your estate plan with a qualified attorney to ensure that it is legally enforceable
- Preparing to continually review and update the plan
Q: What Are the Most Common Estate Planning Mistakes?
A: Some common estate planning mistakes include:
- Putting off making an estate plan until much later in life
- Failing to update and review the estate planning documents after major life changes
- Naming heirs or beneficiaries in a will or trust that do not match beneficiaries listed on the individual asset
- Failing to name an executor
- Failing to name the right person as an executor
- Leaving assets to minor children without putting the assets in a trust or naming a guardian for the assets until the children are old enough
Q: Why Should You Update Your Estate Plan?
A: When you don’t update your estate planning documents, they may no longer reflect your wishes for:
- Your own healthcare
- The person you want to be in control of your medical and financial decisions
- Who you want to manage your estate
- Who you want to benefit from your estate
Unclear estate plans or plans that contradict our stated intentions can result in significant conflict between beneficiaries. In extreme situations, failing to update your estate plan to reflect changes in the assets you own can render it unenforceable.
Contact Stange Law Firm in Kansas City, MO
A review of your estate plan is easier with an experienced attorney. You can have more information about potential issues and know if relevant state laws have changed. If you are in need of professional support when creating or updating an estate plan, contact Stange Law Firm.
