Is it Time to Update Your Estate Planning Documents?
It may be time to contact your estate planning attorney if it has been a while since you updated (or reviewed) your estate plan. Experts recommend updating your estate plan every three to five years—whether changing beneficiary designations or updating estate planning documents—to keep it relevant and legally enforceable. Even though estate planning can sometimes be uncomfortable as some do not like discussing their own mortality, your estate plan must reflect the most up-to-date information available. If you want to protect your assets and plan for contingencies, keeping your estate plan updated is essential.
UPDATING YOUR ESTATE PLAN TO REFLECT LIFE EVENTS
In addition to updating your estate plan every 3-5 years, it is also important to update your plan after significant life events.
Some of these major life changes include:
· Marital or domestic partnership changes for you or family members (marriage, divorce, or separation)
· The birth or adoption of a new child or grandchild
· Your child’s or grandchild’s school funds
· When someone on your estate planning documents becomes an adult
· Death or disability of someone named in the estate
· Death or disability of your executor or trustee
· A name change of someone in your estate plan
· A significant change in financial status
· Illness or disability of a spouse or family member named in the estate plan
· Purchasing a home or another large asset
· If you receive a large inheritance
· Any change in federal or state laws or tax laws
CHANGING YOUR BENEFICIARIES
The biggest reason people opt to update their estate planning is that they want to change their beneficiaries. If you want to change beneficiaries or remove a beneficiary, it is essential to make sure it is reflected in your entire estate plan. You need to ensure there is no difference or confusion between beneficiaries on your estate plan and specific beneficiary documents, such as life insurance or retirement plans. If any listed beneficiaries have passed away before you, it is important to update your estate plan to reflect this change. If you do not take this step, your intended beneficiaries may undergo a lengthy and sometimes contested probate process to get the assets you intended.
WHAT NEEDS TO BE IN YOUR UPDATED ESTATE PLAN?
Your estate plan is made up of many parts and documents. To truly update your estate, you must update all the following documents:
· Your will, which details what assets people will receive after you die, as well as who will be the executor to carry out your last wishes. This may also include a business succession plan.
· Advanced directive or living will, which specifies your end-of-life care wishes and whether you consent to extraordinary measures like ventilators and feeding tubes.
· Medical Power of Attorney, which outlines who you choose to make healthcare decisions for you in the event you cannot make your own decisions.
· Financial Power of Attorney, which gives someone the ability to manage your financial affairs and financial accounts if you are not able to do so on your own.
A comprehensive estate plan may also include a revocable living trust. A living trust allows someone to take ownership of your assets while you are still alive and distributes them to your beneficiaries after your death.
With this type of trust, you would still be able to manage your assets while living.
If you’d like to be connected to an eldercare attorney in our area, please contact Choice Connections of Virginia.
Source: ElderCare Matters: https://eldercarematters.com/blog/how-often-should-you-update-your-estate-planning-documents/
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