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The Heritage Law Center, LLC Blog

When is the Right Time to Update Your Estate Plan?

POSTED ON: August 18, 2016

Like many people who have taken the time to ensure an estate plan is in place, you have likely filed it away in a safe spot, to be accessed upon your passing. But the reality is, an Estate Plan must evolve the way our lives evolve. They are only useful if they reflect your current life situation and goals.

Here are 7 reasons to review your plan:

Marriage

1. Marriage (or re-marriage) does not automatically change the provisions of your will or trust and will not necessarily provide for your new spouse. While marriage does give each spouse some rights in each other’s property, you should change your plan to ensure it reflects your new goals, both individually and as a couple. If you and your new spouse both have children from a previous relationship revising your estate plan could be an essential step in navigating the complexities of providing for children in blended families. (See our post on Estate Planning for Blended Families.)

Divorce 

2. Your original estate plan likely had a goal of providing for your spouse. A divorce is likely to indicate a change in that goal, therefore a change in your plans is likely needed. Once your divorce is finalized, revise your plan as quickly as possible to reflect your new goals and intentions.

Children

3. If you don’t have children, your estate plan may have been drawn up to distribute your assets to your spouse and/or to charitable organizations. Once children are in the mix, you’ll probably want them to be the ultimate recipient of your estate. In addition to providing for your child’s financial future, you may also wish to appoint a legal guardian for your child in the event you and your spouse are unable to care for them. (See our post on Estate Planning for young families.)

Illness or Injury

4. If you or one of your family members becomes seriously ill, you may want to consider changing your estate plan to reflect these increased needs. For example, if a loved one has special needs you can leave assets in a trust that will not disqualify him or her from receiving government benefits. Or you may wish to shift the distribution of assets to help provide for his or her increased financial needs. (See our post on Estate Planning for Special Needs.)

Inheritance

5. If you or your spouse receive, or expect to receive, a significant inheritance, there may be new opportunities to reduce taxes or provide creditor protection. The increased value of your estate may also prompt you to change how your assets will be distributed when you pass away. (See our Trusts page.)

Business Opportunities

6. If you have the opportunity to purchase or sell a small business, it may provide a major change in the nature or extent of your assets and may create different estate planning opportunities. For example, if you purchase a business you may want to create a succession plan. If you sell your business, the capital you receive may require a different plan for asset distribution and reducing the tax burden your heirs may someday face.  (See our post on Estate Planning for Small Business.)

Relocation

7. Estate planning documents are typically valid from one jurisdiction to another, but each state has its own regulations and requirements. For example, if you move from a separate property state (like Massachusetts) to a community property state (like California) you may want to consider changing your separate property to community property to take advantage of favorable income tax treatment. You should consult an Estate Planning Attorney in your new home state to ensure your plans are optimized.

For more information on any of the topics above please contact The Heritage Law Center at mkarr@maheritagelawcenter.com or 617.299.6976.