5 Key Life Events That Should Prompt a Year-End Estate Plan Update
Your estate plan is not a one-time task. It should evolve as your life changes, ensuring that your assets, healthcare wishes, and legacy are protected according to your current circumstances. While it’s essential to periodically review your estate plan, some key life events should trigger an immediate update—especially as the year comes to a close and you prepare for the year ahead.
ESTATE PLANNING
-alg
10/2/20243 min read
Below, we’ll outline five important life events that should prompt you to revisit your estate plan as part of your year-end planning.
1. Marriage or Divorce
Marriage and divorce are two of the most significant life events that can impact your estate plan. When you get married, you may want to ensure that your spouse is named as a primary beneficiary in your will or trust, and consider whether joint ownership of assets or a durable power of attorney is appropriate.
On the other hand, divorce typically requires the removal of an ex-spouse from these documents. Failing to update your estate plan after a divorce could lead to unintended consequences, such as your ex-spouse inheriting assets or maintaining control over important decisions in case of incapacity.
Key Considerations:
Update your will, trust, and beneficiary designations to reflect your current marital status.
If you've named your spouse in your healthcare directives or financial powers of attorney, these documents should also be reviewed and updated.
2. The Birth or Adoption of a Child
Welcoming a new child into your family—whether by birth or adoption—marks a critical time to review your estate plan. One of the most important decisions you'll make is appointing a guardian for your minor children in the event of your passing. Additionally, you may want to ensure that provisions are in place to protect your children's inheritance and set up a trust to manage their assets until they reach adulthood.
Key Considerations:
Appoint a legal guardian for your minor children in your will.
Establish a trust to ensure assets are managed responsibly for your children's benefit.
Update beneficiary designations to include your child if applicable.
3. A Significant Change in Financial Status
A major financial change, whether a windfall or a financial setback, can have a significant impact on your estate planning needs. If you’ve come into a large inheritance, sold a business, or experienced another increase in wealth, you’ll want to ensure that your estate plan reflects your new financial situation and protects your assets from unnecessary taxes.
Conversely, if your financial situation has deteriorated—such as experiencing a major loss or bankruptcy—it’s essential to review your estate plan to assess how best to protect your remaining assets and adjust your beneficiaries or charitable contributions as necessary.
Key Considerations:
Review your asset distribution plan to reflect your current financial situation.
Ensure that your estate is structured to minimize taxes and protect wealth for future generations.
Update retirement accounts, life insurance policies, and other beneficiary designations.
4. A Death in the Family
The death of a family member—especially if they are named in your estate plan—should prompt an immediate review. If you’ve named the deceased family member as a beneficiary, trustee, or executor, you’ll need to designate a replacement to ensure the smooth administration of your estate.
Additionally, the death of a spouse or child may shift how you want your assets to be distributed, requiring an update to your estate plan to reflect your current wishes.
Key Considerations:
Remove deceased individuals from roles such as trustee, executor, or power of attorney.
Update the distribution of assets to reflect the death of a family member.
Consider whether any charitable donations in honor of the deceased should be included.
5. Relocation to Another State
Estate planning laws vary by state, which means that if you’ve relocated to another state, you should review your estate plan to ensure it complies with local laws. For example, states may have different rules for wills, trusts, powers of attorney, and healthcare directives. Failing to update your estate plan after a move could result in certain provisions being invalid or unenforceable.
Key Considerations:
Review your will and trust to ensure they comply with the laws of your new state of residence.
Update any healthcare directives or powers of attorney to align with local requirements.
Check state-specific estate tax laws to see if your plan needs adjusting to minimize tax liability.
As the year comes to a close, now is the perfect time to ensure your estate plan is up to date, especially if you've experienced any of the life events mentioned above. By making the necessary adjustments, you’ll protect your assets, ensure your loved ones are cared for, and make your wishes clear.
At Ament Law Group, we help clients with estate planning and can help you navigate the complexities of updating your plan after major life changes. Contact us today to schedule a consultation and ensure your estate plan is ready for 2025 and beyond.
Contact Us
Address
3950 Wm Penn Hwy Murrysville, PA 15668
General Contact
(724) 733-3500
hello@ament.law
Ament Law Group, P.C. © 2024. All rights reserved.
This website is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.