Don’t neglect to update your estate plan. Drafting one is a great first step, but it can still become outdated in the months or even years following that initial draft. Updates may be needed to offer your family proper guidance and direction.
But when should you update it? One option is just to do it on a set schedule, such as conducting an annual review. But you can also look for important events that mean it is time for an update, and the following are a few examples.
Changes to beneficiaries
For one thing, your beneficiaries may change, such as when a new grandchild is born. Perhaps one of your adult children gets divorced, so you want to remove their spouse from your estate plan. Or perhaps a beneficiary passes away before you do, so you need to reallocate their assets to someone else.
Changes to assets
You also have to consider the assets themselves. Maybe you are a business owner who recently sold your small business, so you need to remove the business itself from the estate plan and include the money from the sale. Perhaps you recently purchased a vacation property and you would like to pass it on to your children so it can stay in the family.
Changes to medical needs
Finally, perhaps you have had a serious medical diagnosis. Your estate plan can address your wishes for end-of-life care, either through a living will or a medical power of attorney.
These are just a few examples of when you may need to update an estate plan. Be sure you know what legal steps to take.
