The Importance of Updating Your Estate Plan: When and Why You Should Review Your Documents
November 19, 2024An experienced estate planning attorney typically discusses two major reasons why people require legally binding financial documents in place and the need to update them regularly. The first stems from the fact that not having an estate plan in place — or an outdated one — can result in probate litigation. It’s not unusual for disputes to arise that end up diminishing an estate’s overall value by as much as 8 percent due to avoidable legal fees and expenses.
The second reason that it’s crucial to craft and update an estate plan involves interpersonal relationships. When individuals fail to provide instructions about how they wish their real estate, cash, and other holdings to be distributed, disagreements break out. Grieving parties sometimes engage in hostile disputes that can irreparably harm their once close familial bonds.
At Brodeur Law, we work diligently to ensure our community members have a definitive estate plan in place. We also encourage people in Connecticut to make the necessary updates and changes.
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When to Review and Update Your Estate Plan
It’s important to keep in mind that less than half of Americans have an estate plan. Those who take the time to work with an estate planning attorney are not always vigilant about making regularly scheduled and timely changes. That being said, these are instances when it’s prudent to review and update your estate plan.
Your Marital Status Changes
Major life events such as getting married, divorced, or having a spouse pass away need to be reflected in your estate plan. In many cases, these marital status changes call for a redistribution of wealth and assets. If you owned a home before getting married, it could be deemed pre-marital property. Unless the deed has both of your names on it or you indicate the property transfers to your life partner, the issue may end up in probate court.
Your Assets Have Increased
The accumulation of wealth and new assets should always prompt people to make changes. Your wishes for loved ones may involve issuing checks for set dollar amounts. Those numbers usually evolve. Purchasing an investment property or buying into a business can dramatically alter your financial portfolio. Reflecting newly acquired wealth in your documents prevents misunderstandings and friction among surviving heirs.
Birth or Adoption of a Child
It may seem counterintuitive, but one of the first things new parents need to do is schedule an appointment with an estate planning attorney. From the moment your partner gives birth, or you sign the adoption papers, the minor child is not necessarily a viable heir until your Last Will and Testament, trust, and other estate planning documents are updated and signed. The financial future and care of minor children call for thoughtful consideration and strategic planning.
Move to Another State
If you have recently moved, aspects of your estate plan may not carry the same force of law in Connecticut. For example, Connecticut requires a Last Will to be signed in the presence of two witnesses. The state’s estate tax, advanced health care directives, and other elements of a detailed estate plan may require changes to conform.
A Beneficiary Passes Away
Imagine that a person close to you has passed away, and you have not taken steps to redistribute their inheritance outlined in your Will and other documents. What happens to the real estate, funds, and personal items they were supposed to receive? In all likelihood, those decisions will be left up to a probate judge after the estate doles out legal fees and court costs.
You Want to Make Beneficiary Changes
Initial estate planning documents can address financial issues that may occur years in the future. Establishing a pool of money or educational accounts to pay for a minor’s private school or college tuition is a good example. Once the beneficiary graduates or decides on a non-college career, the money can sit in limbo. In these and other cases, it may prove productive to reassign the resources.
You Haven’t Updated Your Estate Plan
Knowing when to update an estate plan depends on your financial portfolio, marital status, lifestyle, and changes that impact your beneficiaries. It’s generally a good practice to sit down with an estate planning attorney and discuss long-term strategy at least every two years or sooner. But when circumstances impact how assets will be distributed, don’t delay.
Consult with an Experienced Estate Planning Attorney Today
If you’ve recently moved, haven’t updated your estate plan, or experienced a significant life or financial change, working with a qualified attorney can help ensure your documents reflect your current wishes. Reach out to a trusted legal professional to begin the process and secure peace of mind for the future.
Sources:
https://www.aarp.org/money/budgeting-saving/info-2024/times-to-update-your-will.html
