Deciding what will become of your estate when you pass on is important. And this is where an estate comes in. Despite its fancy name, an estate plan is not just a reserve for the rich and famous. Whatever you have in your name is your estate.
But, an estate plan is not just some document you create, lock up in a safe and wait for your loved ones to access when you are incapacitated or dead. This is a living document that needs to be reviewed and updated from time to time.
Here are some of the top reasons why you may need to update your estate plan.
Changes in your beneficiaries
People will come and go in your life. If your status changes by way of marriage or divorce, it is important that you update your estate plan to reflect these changes in your status. Likewise, if you get a child (through birth or adoption), it is important that you revise your estate plan to include them in your will or trust.
Changes in your net worth
Like the economy, your net worth is likely to change over time. If there is a significant growth in your net worth, it is important that you update your estate plan to include your new acquisitions. Likewise, if your net worth depreciates, you need to revise your estate plan to exclude what you no longer own.
Changes in your location
If you have moved to California from another state, or if you are planning to relocate to another state from California, it is important that you update your estate plan to comply with the laws in your new state of residence. This is especially important because tax laws vary from state to state. And so does laws governing other estate plan documents like wills, trusts and powers of attorney.
An estate plan is a living document that speaks for you when you are either incapacitated or no longer around to make important decisions regarding your assets. However, to be effective, it is important that your estate plan is up to date and reflective of your current wishes.