Creating a comprehensive estate plan is one of the most important things you can do for both yourself and your loved ones. A well thought out estate plan should protect your assets and help them grow over the course of your lifetime as well as ensure that your loved ones are financially secure if you die or become incapacitated. If you have an estate plan in place already, you off to a good start; however, you cannot stop there. Updating your estate plan is as important (if not more important) as creating the initial plan because an out-of-date estate plan can cause some serious unintended consequences. The Los Angeles estate planning attorneys at Schomer Law Group, APC explain when you need to update your estate plan.
Routine Updates
You should conduct routine, scheduled updates of your estate plan at just to make sure everything is in place and that no changes are necessary. There is no hard and fast rule dictating how often you should review your estate plan; however, most estate planning attorney suggest routine updates every three to five years until your children have all reached the age of majority. If you do not have children, a review every three to five years until about age 50 is a good rule of thumb. After that, plan a routine review when you get close to retirement and then every five to 10 years thereafter.
When Do I Need to Immediately Update My Estate Plan?
Along with reviewing and revising your estate plan as a matter of routine, there are certain events should prompt an immediate update to your estate plan, such as:
- Marriage. When you marry, you will likely want to include your new spouse in your estate plan. That may include changing the beneficiary designations on things such as your Will, retirement plans, and life insurance policies as well as changing fiduciary positions within your plan. The marriage of an adult child is also something that could trigger a review because your son/daughter-in-law now has a potential legal interest in the inheritance earmarked for your child.
- Divorce. One of the most common mistakes people make is forgetting to make changes to their estate plan after a divorce. Failing to update your plan after your divorce could result in an ex-spouse as the beneficiary of your estate assets, Executor of your estate, or Agent in an advance directive.
- Birth and Death. The death of anyone who is part of your estate plan (beneficiary, Executor, Trustee, Guardian, Agent) should cause an update of your plan. The birth of a child or grandchild should also be specifically noted in your plan for clarity.
- Children Reach Adulthood. As the parent of minor children, you had to protect your children’s inheritance because they could not inherit directly from your estate; however, when your children become legal adults, you have the option to gift directly to them.
- Asset Changes. Minor changes should be accounted for in your plan; however, if your asset portfolio changes significantly, you should update your estate plan.
- Retirement. You may start withdrawing funds from retirement accounts and selling major assets which should warrant a review of your plan. In addition, if you have not yet considered the addition of a Medicaid planning component to your estate plan, now is the time to do so.
- Serious Illness. Your plan should already address the possibility of your incapacity or even a terminal illness; however, if you are diagnosed with a serious illness, review your estate plan to make sure your incapacity plan is up to date.
Contact Los Angeles Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about updating your estate plan contact the experienced Los Angeles estate planning attorneys at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.
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