Creating a will or trust might seem like a one-time task, but it requires regular updates to ensure your family and assets are protected. Life events can significantly impact your estate plan, and failing to update it can leave your loved ones with a complicated situation.
I recommend reviewing your plan at least every three years; if any of these 10 life events occur, you should review it immediately. This week we will look at the first five.
1. Changes in assets or liabilities: Financial changes – such as buying a new home, selling property or incurring debt – necessitate updating your estate plan. Ensuring your asset inventory is current is crucial for your family’s ability to locate and manage your assets in your absence. If you do not have an asset inventory, it’s imperative to create one and keep it updated regularly.
2. Business ownership changes: If you’ve bought, sold, or started a business, it’s vital to update your estate plan. Proper planning can ensure a smooth transfer of ownership and protect your business assets for the future. Consider succession planning and the creation of business continuity plans to safeguard your business interests.
3. Birth or adoption of a child: Welcoming a new child into your family means updating your estate plan to include provisions for their care and financial security. This includes naming guardians, creating a Kids Protection Plan and setting up trusts. Additionally, you should document your wishes regarding your child’s upbringing, education and values to guide their guardians.
4. Child reaches age of majority (or will soon): As your child becomes an adult, review how they will receive their inheritance and ensure they have someone to make healthcare and financial decisions if needed. Consider a Lifetime Asset Protection Trust to safeguard their inheritance from future risks. This trust can provide financial support while protecting your child’s assets, ensuring they are used responsibly and remain secure for the long term.
5. Death of a loved one: If a beneficiary, trustee, executor or guardian passes away, update your estate plan to ensure your assets are distributed correctly and appoint new individuals to necessary roles. The loss of a loved one can significantly impact your estate plan, and timely updates help prevent legal complications and ensure your intentions are honored.
Planning for life’s changes: Your estate plan should evolve with your life. Regular reviews and updates with an attorney ensure your plan remains effective and up to date, providing peace of mind that your wishes will be honored when needed most.
Don’t forget to return next week when I’ll be discussing five more life events that signal it’s time to review your plan.
Send your questions to ccolan@colanlegal.com and use “Alpine Mountaineer estate planning question” as the subject. We’ll answer your questions in our upcoming issues.
This article is provided by your local estate planning attorney, Corina Colan.
The Law Office of Corina I. Colan / (909) 265-3315 / www.colanlegal.com
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