Previously we reviewed the reasons why you should have an estate plan. The next thing we want to cover is the type of life events that may require an update of those documents. Big life events can be fun to celebrate, but did you know that some of these life events can actually cause a change in your estate plan? Did you retire, recently get married, add a family member (child, grandchild, son/daughter-in-law, step-child, step-grandchild), win the lottery, or recently invest or sell property?
Adding people to your family does not necessarily mean that you have to add them to your will. However, dividing property between family after someone’s passing can be affected when there are spouses and children involved. If your family grows, you should consider if the new members will be included or left out based on the wording of your will. It is not uncommon for us to see wills that were made when parents had only had 1 child that were never updated to include 2nd or 3rd children as beneficiaries. A thoughtful estate planning lawyer can draft your documents so that your estate plan includes new children or other family members automatically, which can keep you from having to change your documents every time a new family member joins your tribe.
Like when people are added to your family, divorces or deaths of people included in your will can alter the way your estate will be handled after you pass. These things should be considered and thought through when you make your will. You may want to amend your documents if there is a divorce or death in the family.
Another reason to amend your estate plan is when new property is added to your estate, such as a house, boat, business, etc. Including that new investment in your plan prepares the family to handle the asset once you pass, or allows you to allocate the new property to someone specific if you desire to do so.
We have gone over a few examples of life events that affect estate planning, but others that you may not think of are significant changes in your net worth, either positive or negative, or purchasing or selling investment properties. A substantial increase or decrease in the size of your net worth may bring different tax considerations, which may change the type of estate plan that is best for you. Further, investment properties or business interests will need be to be specifically considered, particularly if you have partners that are also owners of those assets.
Once you have your estate planning documents and you know they are as up to date as possible, where is the best place to put them?
It is vitally important that the executor/executrix of your estate knows where to find the original copies of your documents. While a copy is great to have, the original is required by the court for probate proceedings. A safe, dry, accessible place is best. If you keep your documents in a lock box or a safe, make sure your executor/executrix knows the combination or has a key.
The attorneys at Skeeters, Bennett, Wilson & Humphrey are happy to help you create your estate plan, update any existing documents, and advise on preparing yourself and your family for the future. Contact us to set up an appointment.