Estate planning is a comprehensive financial and legal strategy that ensures the orderly distribution of your assets and the management of their affairs upon their incapacity or passing. At its core, an estate plan reflects your intentions, preferences and values to safeguard your assets.
Having an estate plan is a step in the right direction, but you must update it regularly.
Change in your family’s circumstances
About 67% of Americans do not have an estate plan, so while having one may make you more prepared than most, you still need to keep it up to date. You should change your estate plan whenever you have a significant change within the family, including divorce, marriage, death or childbirth. You may also choose to revise your living will or adjust your power of attorney even in the absence of a severe medical diagnosis.
Changes in your financial situation
Any substantial financial changes should prompt you to review the estate plan. Changes can include the following:
- Inheritance
- Debt increase
- Income increase or decrease
To guarantee that your estate plan allocates your assets according to your intentions, it should encompass all assets.
Changes in your health
Your health is a factor in your estate plan. For instance, if you have a serious illness or condition, you may want to update your plan to include a healthcare proxy or your living will. Keep in mind that you may want to update your living will or make changes to your power of attorney without a serious diagnosis.
You do not have to experience a significant life event to make adjustments to your estate plan. Numerous individuals modify their plans as their beliefs evolve. It is essential for your plan to consistently mirror your current life.