It’s understandable if you’re under the impression that creating a Will or a Trust is a one-time event that offers perpetual protection for your family and assets. This perception might arise from the way many legal services are structured. Generally, you’ll engage with your attorney, they’ll prepare the necessary paperwork, and you’ll bring these documents home, safely tucking them into a binder, notebook, or drawer. After that, communication tends to cease. Estate plan? Check. However, this perception is far from the truth, and adhering to it could lead to complications for your family when you are no longer there.
The truth of the matter is, life’s twists and turns can significantly impact your estate plan, potentially derailing it from your original intentions. To ensure your plan remains in sync with your life’s developments, it’s highly advisable to review your plan at least every three years. I firmly believe in the importance of this approach, so much so, that I extend a complimentary review of my clients’ plans every three years.
Moreover, if any of the following 10 life events unfold before your scheduled three-year review, it’s crucial to have your plan examined by a professional without delay. Let’s delve into these 10 pivotal life events, understanding how they could influence your estate plan and necessitate potential modifications.
01 | Your Assets or Liabilities Changed
Life is an ever-evolving journey, and it’s improbable that your financial circumstances will remain static throughout. Fluctuations in your assets, such as purchasing a new property, divesting existing assets, or taking on debt, are all signs that your estate plan merits a fresh evaluation. Updates may be necessary in aspects like asset distribution, beneficiary designations, and financial provisions to accurately mirror these changes. This way, you can ensure that your loved ones inherit exactly what you intended upon your passing. Of utmost importance is the regular updating of your asset inventory each time there are changes in your assets. If you haven’t yet set up an asset inventory, it’s crucial to get in touch with us and update your plan to include this vital component. The greatest risk to your family, in the event of your incapacitation or demise, is their unawareness of your assets — what they are, where they’re located, or how to access them. This issue can be resolved by establishing and periodically updating your asset inventory.
02 | You Bought, Sold, or Started a Business
Being a business owner imparts an additional layer of intricacy to your estate plan. Should you have recently ventured into or exited a business, it becomes paramount to revise your plan. It should accurately reflect your desires for the future of your business post your lifetime, ensure a seamless transition of ownership (if that’s your wish), and craft a strategy to safeguard your business assets for your own and your family’s future.
The economic and sentimental value attached to your business can become a remarkable legacy for your loved ones, both in the present and for the generations to follow – provided you know how to optimally incorporate it into your estate plan.
03 | You Gave Birth or Adopted a Child
The arrival of a new child in your family is an occasion of immense joy. As a parent, it becomes crucial to revise your estate plan to incorporate measures for your child’s well-being and financial stability. This includes appointing Guardians for minor children, formulating a Kids Protection Plan, and ensuring their financial safety through Trusts or similar mechanisms.
Moreover, documenting your desires concerning your child’s education, faith, and value system in your plan is also significant. It provides guidance to the legal Guardians about your preferred way of raising your child if unforeseen circumstances were to occur.
04 | Your Minor Child Reached the Age of Majority (or Will Soon)
As your children bloom into adulthood, reaching the age of majority, it’s a fitting moment to reassess how they’ll be receiving their inheritance, ensure that a designated individual can legally make health care decisions on their behalf, and manage their finances should they become incapacitated. Depending on their maturity level, you might want to ponder if they’re prepared to manage assets independently and, if so, how much.
An even more effective strategy might be to safeguard your child’s inheritance lifelong through a Lifetime Asset Protection Trust. This estate planning instrument allows your child’s inheritance to contribute to their future while simultaneously securing its usage and shielding it from any potential future litigations or marital separations they might encounter.
Such an approach guarantees your children’s financial security as they venture into adulthood, fostering financial responsibility along the way.
05 | A Loved One Dies
The passing of a family member is an emotionally distressing event that can have a profound impact on your estate plan. If a departed loved one was listed as a beneficiary under your Will, Trust, or financial accounts, it becomes indispensable to update these documents to ensure your assets will be bequeathed to the correct individuals.
Furthermore, if the deceased individual held a significant role such as Trustee or Executor of your estate, or Guardian of your minor children, it becomes necessary to designate new individuals to assume these responsibilities.
Planning for Life’s Changes
Your estate plan serves as the bedrock for safeguarding your family and your financial wellbeing, both in the present and future. However, estate planning isn’t a one-time endeavor; it should evolve in tandem with your life’s changes.
We’re here to accompany you through life’s transformations, ensuring your estate plan remains current and effective, and giving you the tranquility of knowing your plan will function precisely as you intended when it’s most needed by your loved ones.
If a significant life event has recently transpired, or if it’s been some time since your last estate plan review, now is the ideal moment to reassess your plan. And if you’re yet to draft an estate plan, remember that it’s always better to start planning early than to have no plan at all.
Get started by scheduling a complimentary 15-minute discovery call to explore my Family Wealth Planning Session process. During this session, we’ll delve into your family dynamics and aspirations, address any life changes, and craft a comprehensive estate plan that imparts peace of mind.
And remember, join us next week when I’ll be discussing an additional five life events that highlight the need for a review of your estate plan.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.