For many Americans, estate planning is a foreign or confusing process. Even if you have an estate plan in place, you may not know when you’re supposed to make changes to the documents. Our team at DebnamRust, P.C. has put together some information about estate planning, as well as five clear reasons to go back and review and edit your estate plan.
What Is An Estate Plan?
An estate plan is a collection of legal documents that explain how your assets should be distributed after your passing. It will also include your end-of-life wishes, powers of attorney, and other important information that must be considered if you become incapacitated or have passed away.
Some documents within an estate plan include:
- A Statutory Durable Power of Attorney
- A Medical Power of Attorney
- Beneficiary Designations
- Financial Information
- HIPAA Release
- Digital Log-In Information
- A Living Will
- Declaration of Guardian
- A Last Will & Testament
- A Trust
- Disposition of Remains
As you can see, there are a lot of components to a thorough estate plan. Once these have been set up initially, there are still reasons why you should go back in and make modifications as necessary.
Life Events That Signal It’s Time to Update Your Estate Plan
A Significant Change in Assets
If you have a sudden increase or decrease in assets, you’ll want to adjust your estate plan accordingly; for example, you may come into a significant inheritance.. Having more or less money and property means you need to adjust how it will be distributed and potentially to whom.
Additionally, if you sell property, you’ll want to remove it from your estate plan altogether. For example, if you sell a second home, you can remove it from your list of assets for distribution.
Marriage or Divorce
Both of these relational events will most likely change the directives in your estate plan. When entering a new marriage, you’ll want to include your new spouse in your estate plan documents. This means making them a beneficiary, giving them power of attorney, and other changes that establish them as a significant member of your life.
Similarly, when a marriage ends, you’ll want to clear their name from your estate plan.
Birth of a New Child
It’s important to update your estate plan after the addition of each new child you bring into your family. You’ll want to account for them as beneficiaries and leave instructions for their guardianship and care if you and your partner are to pass away suddenly.
Moving To A New State
It’s always good to review your estate plan after a big move. Many things change when you move; you may be a new homeowner or have a higher income that should be reflected in your estate plan.
It’s also important to ensure that your estate plan is still legal and valid in the new state. Because each state has different laws, you should meet with a local attorney to ensure that your estate plan is still correct after your move.
Loss Of A Family Member
If you have tragically lost a loved one named in your estate plan documents, you’ll want to be sure to remove them from the plan and instead include another family member to fill their role.
You’ll also want to remove them as a beneficiary and figure out a new way to distribute the assets that would have gone to them.
The Importance Of Keeping Your Estate Plan Current
The uncomfortable truth is that anyone could suddenly pass away at any time. It’s essential that you keep your estate plan updated so that if the worst happens, your family is prepared and taken care of to the best of your ability.
If none of these major life events happen to you, a good rule of thumb is to review your entire estate plan every three years to be sure everything is up-to-date. However, you may choose to review the individual documents within your estate plan more frequently.
Estate Planning Help in Dallas and Austin Texas
Our team at DebnamRust, P.C. can help you draft a new estate plan, ensure your current plan is up-to-date and legally binding, as well as answer any questions you have along the way. If it’s time for you to review your estate plan, enlist the help of our experienced attorneys. Call us at (214) 758-8681 or click here to send your information to our team today.