Instead of viewing estate planning as a single event or activity, people should consider this an ongoing activity. An estate plan reflects a person’s life, family and financial assets. All of these things change over time, making it important that an estate plan changes along with them.
As the end of 2020 nears, people might find the new year a good time to step back and review their estate plans.
Some common life changes warranting an estate plan review
As explained by Kiplinger, changes in the family lineup frequently necessitate changes to a person’s estate plan. A young couple may give birth to their first child. The parents should identify a guardian for their baby in the event they die prematurely. The grandparents on both sides may wish to add the new baby to their wills.
When an adult daughter or son gets divorced, parents may want to ensure their assets do not go to a former in-law but to their child and grandchildren only.
Changes relating to executors or trustees
A person originally identified as the executor of a will or the trustee of a trust may pass away, requiring the naming of a new person to fill that role. An illness may prevent a person from carrying out the duties of an executor or a trustee.
Look beyond wills and trusts when updating estate plans
Consumer Reports notes that people pay special attention to all the estate planning tools at their disposal. This includes a durable power of attorney, a health care proxy and an advanced directive. These documents require review along with a will or a trust.