When you are formulating your estate plan, it is important to avoid as many errors as possible. A common error that many make with estate planning is never making any update. ASo when you have a current estate plan, it is important that it be updated at least annually.
A good rule of thumb to keep in mind about the estate plan is that it should be updated whenever a change takes place in the law. Also, the estate plan should be reviewed if a life event takes place, such as a birth of a child, a marriage, or a death. Besides these, there are other reasons that may warrant an update to the estate plan.
You Live in a Different State Now
The laws governing estate plans are governed by the state in which it was written. It is important to understand that each state also has its own requirements in order to be valid. Some of these requirements involve the amount of witnesses or a certain amount of the estate being inherited by a spouse. Plus, there may also be taxes involved with an estate plan.
The laws governing the estate plan may vary and depend on many factors, such as power of attorney, a will, or advanced medical directives. So if you decide to live in a different state, those documents need updating in order to be effective.
It is important to work closely with an estate planner so that you can prove your new state of residence. This will be important if an estate is a significant amount and the state you moved away from involves inheritance tax. If there is no update, then the state may assume the taxes are legitimate for the estate.
You Own Multiple Homes
When you have an additional home, it is important to have your estate plan updated to reflect the addition. The second home will cause an increase in the estate’s value and possible taxes involved. By working with an estate planning attorney, they will be able to assist in this update.
The Family Grows
When the family grows with having an additional child, there should be an update to the estate plan. You and your estate planner should go over the estate plan and make updates accordingly. This way the new family member can be included in any inheritance. This inclusion will also eliminate any possible conflicts within the family.
A Change in Liabilities or Assets
When an estate plan changes in value, it needs to be reviewed. This review should involve the amount that increases and/or decreases. The amount to be divided also needs to be reviewed to reflect the change so that the amount divided remains how you desire it to be.
Get Your Estate Plan Updated
If you are experiencing a change in your life and you need to update your estate plan, it is important to get in touch with an estate planner. When you get in touch with us today, we’ll provide a thorough review of your current plan and make the needed changes based on your desires.