Important Life Events That Should Trigger an Update of Your Estate Plan
The timely creation and updating of estate planning documents is very important, as is the way you go about carrying it out. This is because estate planning is about a whole lot more than simply how your property will be distributed after you die.
Estate planning is about dealing with major life events, living well with disabilities, how you will be cared for when you can’t care for yourself, ensuring appropriate care for your minor children, and even about what will happen to your pets after you pass away.
That said, there are a number of important life events that should motivate you to get your estate planning affairs in order. The following events are the most significant life events that should let you know that it is time to consult with an experienced estate planning attorney about your estate plan:
The Death of Someone Close to You or a Health Scare of Your Own
When you experience the death of someone close to you or some kind of health scare of your own, you are forced to recognize that you will not be here forever and that your loved ones may need support after you are gone. When faced with this realization, it should become all to clear to you why you need to properly prepare for your death or incapacity.
Preparing, at the very least, means creating a will. But, it also means updating or creating other estate planning documents. For example, if someone that you have nominated in your will as your personal representative or whom you have designated as the beneficiary of your life insurance policy has died before you or has become incapacitated, you should update those documents to reflect the change
Marriage or Divorce
Time and again people fail to appreciate the considerable legal consequences and changes that are brought about by marriage or divorce. Nevertheless, when you get married or divorced, all of your personal relationships usually undergo significant changes.
It is, therefore, very unlikely that you will get married or divorced and not disturb any of the plans you have put in place for how your estate is to be distributed after you die. This is why marriage and divorce are two of the key moments in life where your estate planning documents should be reviewed and updated or created new if they are not already in place.
The Birth of a Child
When your first child is born, you automatically acquire a very important reason to make a will. If you don’t leave behind a will when you die, the state’s intestacy laws will make decisions regarding your children.
Under intestacy, your children will most likely inherit something from your estate. But a properly prepared will, with clearly defined instructions, will clear up any confusion regarding which child is entitled to what portion of your estate. Leaving it to intestacy might not result in your property being divided amongst your children in the way you would have preferred.
If you have minor children, then making a will becomes especially important. If you don’t at least have a will that nominates a guardian, the state will dictate who will get guardianship over your children when you die or become unable to care for them yourself.
Starting or Selling a Business
Starting, selling, or closing a business, is yet another major life event that should motivate you to make, review, and/or update your estate plan. Family businesses regularly include several generations of family members with all kinds of roles in the business, from shareholders to employees.
Nowhere in estate planning is there more potential for confusion than when you have a family business and all the family members have different roles in the organization. This area of estate planning is called “business succession planning” and is primarily concerned with how to effectively have your heirs take over and continue your business after you die.
Buying or Selling a Home
Acquiring a home or real property is also one of those significant changes in life that raise a flag with regards to updating your estate plan. Buying property can result in a sizable increase in the value of your estate and the gain or loss can have an effect on every beneficiaries’ share of the estate you leave behind.
Whenever you buy or sell property, you should update your estate planning documents. In addition, if you don’t already have one, you should consider creating a revocable living trust to hold the property. This can considerably reduce the likelihood that your estate will need to be probated.
It’s Been Awhile Since You Last Reviewed or Updated Your Estate Plan
Along with the other reasons for reviewing and/or updating your estate planning documents, a lot of things can change as time passes. These include laws and regulations, your health and the health of others who you care about, your relationships, your individual priorities, and a variety of other things that may influence how you want your estate to be distributed. Consequently, it is important to make sure that your will and all other estate planning documents are up-to-date and that they still reflect your wishes.
Seek Advice From a Skilled and Knowledgeable Sonoma County Estate Planning Attorney
If you have any questions or concerns regarding when or how frequently you should update your estate planning documents, please feel free to contact The Law Offices of Bridget Mackay today by visiting our contact page to arrange a consultation. We serve communities in Sonoma and Marin counties.