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Just like all of your devices, an estate plan should be updated regularly. When you see that your phone or laptop has a new update available, you jump to the occasion and update your tech to keep it working. The same should apply to your estate plan. Whenever any change is made in your life, you should update it accordingly to make sure the plan will continue to suit you and work properly.

Even though some changes are unexpected, all significant alterations in your life should be reflected in the estate plan. Updating it after every change will ensure there are no surprises and mishaps in the future, allowing you to have peace of mind. Life is fast paced, and ensuring your estate plan is up-to-date with you today and not twenty years ago will be very useful if it is ever needed.

So, When To Update It?

Updating your estate plan makes sure you and anyone you include in it are protected and will continue to have their wishes honored. So, let’s take a look at some things that signal you to update your plan.

Wedding Bells

When you get married, your name is not the only thing that might need changing. Your estate plan changes too, and it is up to you to make sure it properly reflects those changes. Your estate plan now needs to include your spouse as a beneficiary, and you may also allocate them to be your new health care proxy and power of attorney.

On the other hand, getting divorced also means things in your estate plan need to change. When you get divorced and cut all legal ties with your ex-spouse, you will need to remove them as your beneficiary, and possibly as your health care proxy and power of attorney.

Example: A few months ago, Kaitlin married John. She swiftly updated her estate plan to make him a beneficiary, her health care proxy, and her power of attorney. Then, a few years later, they divorced. Kaitlin properly updated her estate plan, removing John from the roles and replacing him with her sister. Most states have laws that are very specific about assets left to spouses, so if you married/divorced and did not change your estate plan, it will cause you and your heirs a lot of easily avoidable stress.

A New Child

Regardless if you birthed or adopted the child, it’s a beautiful moment. This new family member must now become a part of your estate plan. It is now necessary to ensure that your child is your beneficiary, and it is up to you to decide whether to set up trusts for them. Additionally, it is crucial to appoint guardians for your child in case something were to happen to make sure your wishes are honored. Also, once your child becomes an adult, you may want to update their financial restrictions.

Example 1: When Michael and Wendy adopted their son, they updated their plan to include him as their beneficiary. They also set up a trust for him to properly manage his inheritance and appointed Michael’s sister as their son’s guardian if anything were to happen to him.

Example 2: Michael and Wendy get married. They both have kids from prior marriages and relationships. Even though Michael and Wendy are raising their kids together and are treating them equal, the kids’ share of inheritance may not be equal especially they have more kids together. Adopting each other’s children from prior relations will also have to be incorporated into an estate plan and may warrant an update.

Financial Change

Any important financial change, like receiving an inheritance, selling a property/business, or a large change in income, means that it is time to update your estate plan. These changes impact how your assets are distributed, and need to be altered in the estate plan to optimize tax benefits as well as to make sure your financial status is properly reflected.

Example: When Michaela acquired a large inheritance from her grandfather, she updated her estate plan to include her new assets and to ensure her heirs will benefit from this. She also updated her tax strategies to minimize future liabilities.

Tax Law Changes

Just like life can change fast, tax laws can change faster. It is vital to stay up-to-date with them to ensure your estate plan remains accurate. Consistently updating your estate plan to keep in line with new tax laws will greatly minimize future problems and maximize the benefits your heirs will be getting.

Examples: A new tax law in Gabriel’s state increased the estate tax exemption limit. Gabriel knew to reach out to his attorney to update his estate plan in accordance with this. In doing so, he lowered the chance of future issues and ensured his assets would be distributed as he wished.

Moving

If you move to a different state or country, it is absolutely crucial to update your estate plan to make sure it fits the new laws of your location. Different places have different rules about all the documents of an estate plan, so updating your plan in accordance with the new laws will make sure everything stays legitimate.

Example: Once Raegen moved from Vermont to Massachusetts, she updated her estate plan to make sure everything complied with MA laws. This ensured her estate would remain managed properly, while still respecting her wishes, in her new location. Different states have various laws with many differences, so it is key to consult with an attorney when moving to avoid any liabilities.

Passing of a Loved One

The tragedy of losing a loved one is a very significant change, so you need to update your estate plan to maintain effectiveness. Whatever the person’s role was in the plan, a beneficiary, executor proxy, etc., it must now be updated to ensure you are prepared for the future.

Example: When Melissa’s father passed, she needed to update her estate plan because he was her health care proxy. She needed to appoint a new one, so she chose her brother to ensure her wishes will be honored.

Reviewing Regularly

Even if there have been no significant changes in your life, it is just as important to review your estate plan regularly, regardless. You should aim to review every 2-4 years, with or without major changes. This will ensure that you still agree with everything you’ve previously written, and will continue to make sure all your wishes are honored.

Example: Every three years, Jason meets with his attorney to reassess his estate plan and make sure everything still suits him and the new laws that have since been created. Even though he hasn’t had any major life changes, these scheduled reviews are critical to ensuring his plan remains relevant.

Bottom line

Keeping your estate plan up-to-date is so, so important to make sure all your wishes, new and old, are honored and respected. Reviewing your plan regularly and updating it whenever something big in your life changes allows you to control your estate, make all decisions in advance, and have peace of mind in knowing you are fully prepared for the future. If things have changed in your life, or if it’s just been a while since you’ve taken a look at your estate plan, schedule a consultation with us and we will help you make sure everything is the way you’d like it to be.

By: Nicholas S. Ratush, Esq. and Rebecca Viknyanskiy, intern.

About The Author

Nicholas S. Ratush, Esq., is licensed to practice before State and Federal Courts of the Commonwealth of Massachusetts and the State of New York. Currently, his practice is located in Holyoke, Massachusetts where he serves the greater Western Massachusetts community.

Nicholas was born in Kyiv, Ukraine and grew up in Brooklyn, New York. He received his Bachelor of Business Administration from Pace University majoring in Information Systems. He received his Juris Doctorate from the Brooklyn Law School in 2005 and has been practicing law since 2006. He also achieved his Master of Laws degree from the New York Law School with a concentration in Tax Law / Estate Planning.

Nicholas Ratush believes that effective client representation starts with a thorough examination of every detail of a case. That process often leads him to discover the vital pieces of information that are essential to develop highly effective strategies for dealing with the issues presented.