Don’t ‘Set It and Forget It’

Reasons to update your estate documents

So, your estate documents have finally been prepared (yay!). At a minimum, that means you have:

  • Last Will & Testament – that describes your wishes for the distribution of your property and the care of minor children when you pass away.
  • Financial Power of Attorney – that allows a trusted person to manage your finances if you no longer can.
  • Medical Directives – that outline allowable medical procedures to be performed and that assign a trusted person to make medical decisions on your behalf if you no longer can.

You’re all set, right? Check that box and move on? Sort of. Because life is fluid and situations change frequently, there are many reasons to make sure you regularly update your estate documents. Some of those reasons are:

  • Family changes (marriage, divorce, death, birth, adoption). Make sure all members of your family or circle of friends are included (or excluded) appropriately.
  • New residency. Estate documents are state-specific. If you move to a different state, your documents need to be updated to reflect your new state’s rules and regulations.  
  • Modified tax laws. Estate planning goes hand-in-hand with tax laws. Strategically planning for your heirs to inherit your property in the most tax-efficient way must take modern tax laws into account. 
  • Substantial change in assets and/or liabilities. A large positive or negative change in assets and/or liabilities could mean you need to make adjustments to the registration or disposition of certain accounts. Sometimes this can also lead to a need for more or less life insurance.
  • Acquisition or disposition of a significant asset. Your grandfather’s gun collection was given to you and now needs to be addressed in your own estate documents. The family’s vacation home was sold and will no longer go to your kids. Situations like these need to be given specific attention.
  • Beneficiary with special or altered needs. Special care should be taken to place reasonable legal restrictions (when warranted) on inheritances to protect your heirs.  

Coordination of estate planning, tax planning, and financial planning can help ensure that you create your intended legacy. Keep your documents current!