Life Events That Should Trigger a Call to Your Estate Planning Attorney
Life is full of surprises, and none of us know just how much time we have. Nevertheless, estate planning helps to protect your loved ones and ensure that your final wishes regarding the passing along of wealth and assets are known.
Still, creating an estate plan is not a one-and-done undertaking. You’ll need to update your plan periodically to reflect major life changes, both good and bad. That, then, prompts the question: Which life events, in particular, should prompt you to call your estate planning attorney?
Major Life Events and Estate Planning
The list of loved ones you want to leave your estate to may change over time. Events like marriage and divorce can impact your final wishes, too, as can the birth or adoption of a child or the death of a family member. Major financial shifts, retirement, and even moving to another state or country with different laws can also impact your plan.
Each of these circumstances is described in more detail below:
Marriage
Marriage isn’t solely about spending the rest of your life with the person you love. It’s also a kind of contract. Marital property may not only include wealth and assets you acquire during the marriage but sometimes the assets you bring into the marriage as well.
States have different laws about spousal inheritance, but partners are due at least some portion of assets in every state. In some cases, they’ll get everything not protected by existing trusts, prenuptials, or other legal devices. Therefore, whether you want to give a spouse more or set something aside for other beneficiaries (like children from a previous marriage), it’s best to revisit your estate plan when you get married.
Divorce or Separation
When you separate from or divorce your spouse, your shared marital assets will be split according to the laws in your state. However, you’ll still need to adjust any wills, trusts, powers of attorney, and beneficiary designations (for life insurance, retirement accounts, etc.) to reflect the change in your relationship. If you share children, you might also need to adjust legal documents regarding guardianship and trusts.
Birth or Adoption of a Child
In some states, children automatically inherit a portion of your estate when you pass away. In others, your spouse gets everything. When you add dependent children to the family, either through birth or adoption, you should consider making changes to your estate plan that account for issues like guardianship, trusts, and other protections for passing along wealth.
Death of a Spouse or Family Member
When you lose a loved one, be they a spouse, child, parent, or sibling, the last thing you’re probably thinking about is updating your estate plan. However, it’s best to address it sooner than later to include new beneficiary information, as well as assigned executors, if necessary.
Significant Changes in Financial Status
While you certainly want to grow your wealth to be able to pass it along one day, it needs to be there when you need it beforehand. If you suffer a job loss, medical issues, or other life changes that require you to dip into your savings, you may want to adjust your estate plan.
The same is true if you enjoy significant financial gains, such as an inheritance. Don’t forget to implement, monitor, and amend your business succession plan, especially during changes in ownership.
Retirement
For many people, retirement means carefree travel and pursuing personal interests. However, you may also develop long-term care needs as you age. Your estate plan should account for potential expenses later in life so you can remain comfortable and cared for, along with provisions for medical and financial power of attorney, estate executors, and so on.
Moving to a Different State or Country
Inheritance laws vary not only between states but between countries as well. Whether you plan to retire elsewhere or move for other reasons, it’s important to consult with an experienced estate planning attorney who can advise you of the changes you’ll need to make.
Changes in Laws Affecting Estate Planning
Laws regarding estate succession, taxes, and finances in general are not only complex but ever-changing. Working with a trusted attorney to remain up-to-date helps you to adjust your plans as needed, comply with new laws, and enjoy the greatest benefits from your hard work.
Don’t Wait for Life to Happen
Creating an estate plan is a great first step to protecting wealth and assets for loved ones, but you also have to stay on top of changes associated with major life events like marriage, birth, retirement, and more. Working with a qualified attorney will allow you to proactively manage your estate plan to protect wealth and assets for yourself and your loved ones.
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