Many people in Indiana understand the importance of estate planning. However, some people create estate plans and subsequently fail to review them and make needed adjustments when the circumstances of their lives change. If you do not update your estate plan when you undergo major changes in your life, unintended consequences could occur. You might accidentally disinherit a loved one or have your assets distributed to someone you no longer wish to benefit from your estate. Here are some examples of situations when it might be time to update your estate plan.
Major changes in your family situation
Several major changes in your family situation should prompt a review of your estate plan, including the following:
- New marriage
- Birth/adoption of a child
- Remarriage/blended family
- Death of a loved one
When any of these major life events occur, you should review your estate plan and make any needed changes to reflect your current family status. If you fail to include a new child or fail to remove an ex-spouse, your assets could be distributed in a way that you do not want. Failing to update your durable power of attorney and your medical power of attorney after a divorce could also mean that your ex-spouse could make important decisions for you if you become incapacitated if he or she is your designated agent.
Other changes should also prompt a review and update of your estate plan. For example, if your named executor or successor trustee is someone you no longer want to handle your estate, you will need to modify your will or trust to choose someone else. Beneficiary designations on your 401(k), IRA, and life insurance policies might also need to be changed. Estate planning should be an ongoing process instead of something that you set and forget.
It is a good idea to schedule a regular review of your estate plan to make sure the documents still reflect your wishes and your situation. In addition to a regular review, you should also take another look at your estate plan any time you undergo major changes in your life. Reviewing and updating your estate plan can ensure that it continues to reflect your wishes and will not result in something you do not intend.