Once you create a comprehensive estate plan, you have protection in place in case you die or experience a medical emergency. In theory, the documents you created will protect you for years if not decades.
Some people do create documents and then never revisit them. However, that is a dangerously hands-off approach to estate planning. Most people will experience one or more life events that would be a valid reason to update or adjust their estate plan. Making updates at the right time ensures the validity of your documents.
When is it time to change your estate plan?
When someone you love dies
Estate plans usually focus on the people closest to you. Your spouse and your children are probably the primary beneficiaries of your estate, along with grandchildren, nieces, nephews and possibly even siblings. If someone that you listed as a beneficiary dies, updating your estate plan to redistribute their inheritance to others is a sad but necessary step.
When you divorce
Given that your spouse probably plays a major role in your estate plan, you will want to update your documents and remove them when you divorce. You obviously won’t want your ex-spouse to be the one making your medical decisions or inheriting your business.
When you start thinking about retirement
Estate planning isn’t just about what happens when you die. It is also about your golden years and the medical and financial support you may require later in life. As you approach retirement, it may be time to revisit your estate plan, change ownership of major assets and think about diminishing the value of your estate.
If you own a business, thinking about your impending retirement might mean beginning to create a succession plan so that the company will continue after you leave.
When your medical situation changes
Those facing a major diagnosis or health issue will likely want to create advance directives in case they become incapacitated. Those considering future decline caused by age may also want to provide guidance for loved ones about their medical preferences. Even if you already have advance directives on record, you may want to change or update them as your wishes change along with your health.
When your financial circumstances change
Whether you have gotten rid of assets that were once a cornerstone of your estate plan or have added valuable holdings to your portfolio, you will want to update your estate plan when your personal property changes substantially so that instructions in your will are as accurate as possible.
Recognizing that it might be time to update your estate plan helps protect you and loved ones from oversights and gaps in your existing plan.