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Big‌ ‌“Life‌ ‌Changes”‌ ‌Often‌ ‌Mean‌ ‌Big‌ ‌“Estate‌ ‌Plan‌ ‌Changes”‌

Some people who put together an estate plan do so when they start a family – assuming they put an estate plan together at all during their lifetime. While putting an estate plan together is a good thing to do, people make few updates once the plan has been created, despite other key life events happening over the years. This can be a mistake that can place your assets into a costly probate or into the wrong hands. To make sure you do not run into these issues and your wishes are followed in the event of your death or incapacity, below are nine life decisions or events that should get you thinking about updating — or creating — your estate plan.

IMPORTANT LIFE DECISIONS

 

There are several important life decisions that should factor into your estate plan. They include:

  • Getting married: Estate planning after tying the knot does not have to be complicated. Simply updating your beneficiary information, purchasing a life insurance policy, and updating emergency contact information are all things that should happen right away. You should also consider preparing a will and powers of attorney for healthcare and financial matters. As your marriage progresses, consider a revocable trust as well. Having discussions with your spouse about how you want your estate to be managed depending on different scenarios is also important.
  • Getting divorced: While couples do not plan for divorce, many spouses go through this process. For many, the emotional toll and legal complexities of divorce can be overwhelming. Oftentimes estate planning is overshadowed by the divorce, resulting in unintended consequences. Making sure you make changes to your estate plan as soon as your divorce proceedings have been finalized will make sure your ex will not end up with life insurance proceeds or other assets of yours.
  • Buying life insurance: These policies are present in virtually all estate plans and serve as a useful source of liquidity, education-expense coverage, and financial support for your family or loved ones. Make sure to list all beneficiaries under the policy and make sure to update them as time passes.
  • Buying a new home: When you purchase or refinance a home or other real estate, you should always make sure the asset is titled appropriately. If you use a trust, sometimes a lender will take a property out of a trust during a refinance. It is important to remember to retitle the house to your revocable trust.
  • Having a child: While adding another member to your family is an exciting time in your life, it is an opportunity to update your estate plan. A new child necessitates major revisions to your estate plan. This not only affects who will inherit your estate upon your death but will also require you to decide who will be the guardian of your children if you should die before they become adults. As your child grows and matures — and more children are added — your estate plan will likely continue to change.
  • Starting a business: If you start a business or ownership interest changes in a current business, you need to understand what impact these changes have on your estate plan. Even more, there may be tax implications that could affect your heirs without proper planning ahead of time. Additionally, consider how the business will continue to function or be disposed of at your death.
  • Death of a loved one: The passing away of someone listed in your will is often overlooked in estate planning. These individuals may be named guardians to your children, have an inheritance allocated to them, be designated as emergency contacts, or may be named as executors of your estate or trustees of your trust. Leaving the role vacant can have terrible unintended consequences and necessitates transitioning new people to fill the void left behind by your loved one’s death.
  • Moving to another state or country: When you change your residency from one state to another, you must review your estate plan to make sure it conforms with local laws. The same is true if you move to another country. Likewise, if you have property in more than one state or country, special attention must be paid to how those assets will be distributed according to your estate plan and applicable law.
  • Change in work benefits: Whether this happened through a promotion, demotion, or your employer just changed the benefits they offer, this could impact the type amount of assets you have available. Look at your estate plan to see if your goals are still achievable or if you can do more with what you have.

 

ESTATE PLANNING ADVICE

 

Planning based on your life stages is important because your circumstances over the years will surely change. If you have any questions about estate planning — or have had to make a recent big decision in your life — contact us to learn more about your options.

 

 

North Little Rock Office

1 Riverfront Place, Suite 650

North Little Rock, AR 72114

Fax: 501-372-1206