There are several points throughout a person’s life when it may be a good idea to update an estate plan. A person who turns 18 should, at minimum, have powers of attorney that name people to make healthcare decisions and take over finances if the person is incapacitated by illness or injury.
Most people revise the estate plan when they get married. The plan may need another revision if they have a child. The estate plan might need to name the surviving spouse as the full beneficiary. Otherwise, minor children may inherit a portion of the estate. The surviving spouse might then have to go to court and get approval as a guardian to manage the children’s inheritance until they turn 18. An estate plan should also name a guardian for minor children in case both parents die at the same time.
If the marriage ends in divorce, the estate plan might need to be changed again. It is important to remember that this is not just about changing the will; beneficiary designations should be altered as well. Otherwise, an ex-spouse might get funds that a person anticipated using in another way. Other changes that may prompt a review of an estate plan include retirement, the death of a beneficiary, a move to a new state or tax law changes.
There are steps that people can take to help ensure family members understand the estate plan and to make it less vulnerable to challenges or less likely to create conflict among family members. For example, discussing the plan and its rationale with family members over time may help them understand why certain decisions were made. Having an attorney assist with estate planning may reduce the likelihood of errors that could make them confusing or invalid.
Source: Bankrate, “Estate planning triggers: When to re-evaluate your estate planning strategy,” Jennifer Bradley Franklin, 3/4/2019