When should you update your estate plan?

On Behalf of | Aug 17, 2021 | Estate planning

Many people consider an estate plan a finished document. The truth is that individuals should review and revise elements of the plan on a regular basis. Even if you do not update the plan every three to five years as recommended, it is crucial that you make changes after every significant life event.

Based on their unique circumstances, everyone faces different life events. While every life is unique, there are some common events that should necessitate estate plan revisions, including:

  • Commercial or residential real estate transactions: Buying or selling property should immediately cause an individual to revise their estate plan. Whether it is an income property, a vacation home, a business property or a new family home, it is crucial that the estate plan reflects your current real estate portfolio.
  • Changes in marital status: Whether it is marriage or divorce, this significant life event means that people need to update numerous documents. In addition to the estate plan, individuals should also update their life insurance policy and retirement plan beneficiaries.
  • Additions to the family: Whether it is the birth of a child, stepparent adoption due to marriage or adoption through an institution, it is crucial that parents update their estate plan to include these new family members.
  • Death of a loved one: It is uncommon for individuals to specify both primary and secondary beneficiaries in their will. Unfortunately, when a primary beneficiary dies without a secondary option, it can throw the estate into turmoil.

Unfortunately, many individuals see an estate plan as a one-and-done prospect. The estate plan, however, must be reviewed and updated on a regular basis. Even if people do not revise their plan every three to five years as encouraged by financial experts, individuals must update the estate plan to reflect any significant life events.