Certain life events may warrant an update to your estate plan, such as changes to your marital status, family members, or your assets. It’s critical to review and update your Will and other estate planning documents after such a milestone; otherwise, your most up-to-date wishes may not be carried out if you pass away unexpectedly.
Here are six major life events that may require you to update your estate plan.
When you tie the knot, make sure your new spouse is added to your estate plan per your wishes (and considering the terms of any premarital/prenuptial agreement you may have signed), after your marriage. If applicable, you may want to add your new step-children to your estate plan as well.
However, you do not have to be legally married to rethink your estate plan. People in domestic partnerships can also add significant others to their estate plan at any time. Keep in mind that if you are not in a legally recognized marriage, your partner may not receive anything upon your death unless it is clearly laid out in your estate plan or you have named them as your pay-on-death or transfer-on-death beneficiary for all of your financial accounts and home (if applicable).
If you are recently separated or divorced, you should to remove your previous spouse from your Will or any payable-on-death accounts and update the beneficiary information to either your children, a friend, or another family member. More importantly, if for some reason you wish to maintain an ex-spouse as your beneficiary for any reason, you must sign a new set of estate planning documents that are dated after your date of divorce, because Virginia statutes provide that a divorce effectively disinherits your spouse on your older documents and also removes them as an executor or agent under a power of attorney.
If you are a parent of a minor child, it’s critical to have an estate plan that lays out exactly how you would like your children to be cared for if you pass before they turn 18 years old. This includes appointing a guardian if something were to happen to both you and your spouse or partner, or addressing what role you may want your new spouse as a step-parent to have in your child’s life if you predecease them.
If you’ve recently had a child, adopted a child, have a new grandchild, or want to add your step-children to your estate plan, write out your wishes clearly in your Will, including whether the new members of your family will become beneficiaries to parts or all of your estate.
4. Incapacitation or death of a major beneficiary
You should rethink your estate plan if a major beneficiary such as a spouse, child, parent, or sibling dies or becomes seriously injured or incapacitated. You may want to remove them from your Will and change your beneficiary information. Alternatively, you can change how much or how little the injured or incapacitated beneficiary will receive from your estate or, if you are their guardian, how they will be cared for after your death. This may include determining whether you need a Special Needs Trust for an incapacitated child or other adult family member. You’ll also need to change your Will if you had appointed the person as the sole executor of your estate and did not choose a backup.
5. A personal health decline
Review your estate plan if you have significant negative changes in your personal health, such as a debilitating accident or a major medical diagnosis. You may want to create or update your power of attorney documents to ensure an agent is appointed to make health or financial decisions for you in the case of incapacitation, cognitive decline, or coma. When choosing your agent, make sure you pick someone you can trust to act on your behalf, be an advocate for you, and keep your wishes in mind.
6. Significant changes in assets
If you’ve recently acquired more assets, such as through the inheritance of a parent’s estate or winning the lottery, you may need to make changes to your estate plan. The number of assets you own in total will affect how much your beneficiaries will receive so it’s essential that you specify these assets in your Will. This also goes for assets you no longer own that need to be removed or replaced.
Even if you’ve had no major life changes, it’s still a good idea to review your estate plans at least once every year or so to ensure it aligns with your current wishes. If you need help with this task, The Law Office of Patricia E. Tichenor, P.L.L.C., is here to help. Schedule your free virtual consultation with one of our experienced attorneys today.