An estate plan is a series of legal documents outlining your desires for the distribution of your possessions and the care of any minor children after you die. It often consists of wills, trusts, powers of attorney, and healthcare directives.
An estate plan is vital for everyone because it ensures proper asset distribution that follows your intentions. It can also help to reduce taxes and legal issues for your heirs.
Big life changes may require an update
You should review and update your estate plan every three to five years. However, certain life events may necessitate more frequent updates. This includes significant life and financial changes like:
- Marriage
- Divorce
- Birth or adoption of a child
- Death of a beneficiary
- Purchase of property
- Financial status
- Acquisition of substantial assets
Changes in the law, particularly tax laws, may impact your estate plan and can potentially be a reason to reach out to a legal professional.
What are the benefits of an updated estate plan?
Keeping your estate plan current ensures that it accurately reflects your wishes and circumstances. An updated plan can help avoid legal disputes among your heirs and ensure the proper distribution of assets. It also ensures that you manage the guardianship of any minor children according to your wishes.
To update your estate plan, review your current documents with your attorney. Discuss any changes in your life or financial situation, and make the necessary adjustments to your will, trusts, and other estate planning documents.
It is also good to update the beneficiaries on retirement accounts and insurance policies. Do not wait until it is too late—keep your estate plan current and protect your legacy.
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