When Should You Revisit Your Estate Plan?

August 23, 2012 Posted In Estate Planning
by Colorado Estate Matters

Have you taken the time to sit down and form an estate plan? If so, congratulations. You have taken a crucial step, one that adults of all ages should take no matter what their age or health status. But that does not mean you are home free. Because life circumstances can change, you’ll want to take a look at your will, living trust or any other plans you’ve made regarding the end of your life.

A good rule of thumb is to revisit your estate plan at least every five years. But major life changes warrant a retooling, as well. Take relationships for example. Have you gotten married recently? Divorced? Ended a committed relationship with someone you named in your will? If any of these happened since you specified your final wishes, you’ll want to amend your documents. Do not forget about documents outside your will or living trust; assets such as retirement accounts, life insurance, joint bank accounts and real estate may need to be changed, too.

Sometimes the loss of a spouse is not by choice. If your spouse dies, the last thing you will probably feel like doing is attending to paperwork. Eventually you will want to name new beneficiaries for your spouse’s retirement assets that you may have inherited. In doing so you will prevent your heirs from losing income tax benefits that come with these accounts. Also keep in mind that current estate laws allow widows and widowers to add unused exemptions of their deceased spouse to their own.

Perhaps instead of losing a spouse or a partner, you gained a new member of the family. Having a baby is often the impetus for estate planning, but with all of the other changes that having a child brings, it can be easy to forget to form or change an estate plan. In addition to changing your will, you will want to appoint a guardian for your children in case you become unable to care for them.

Finally, if your health becomes a serious issue, you’ll want to review your plan with an attorney and bring it up to date. Make sure you have a power of attorney,  a trusted relative, spouse or close friend who can make decisions for you if necessary. Ideally, this should be done during the initial planning stage, but relationships can change, so you will want to make sure the person you designated is still the best choice.

Source: Forbes, “When Should You Redo Your Will?” Deborah L. Jacobs, Aug. 9, 2012

Call Colorado Estate Matters, Ltd. if you have had a life change and need to change your Estate Planning documents.

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