If you have executed a valid Will, you are more prepared than half of American adults with children. So pat yourself on the back! It is, however, important to periodically review your estate plan to ensure it still fits your changing needs. Here are 10 possible reasons why you may need to review or update your estate planning documents:
1. Marriage or Divorce: With a marriage or divorce, you are changing your potential beneficiaries. After marriage, you may want to appoint your spouse as your guardian or as the administrator of your estate. Conversely, after a divorce, Texas law treats your former spouse as if he/she pre-deceased you. This means, your assets may go to a contingent beneficiary. On some occasions, though, your former spouse can still be considered a beneficiary of certain accounts if you don't change them.
2. Children: The birth or adoption of a child requires special consideration of your estate plan. You may want to designate who will care for your child in the event of your incapacity or death, set up a testamentary trust for the benefit of your child, or simply add them to your existing documents.
3. Relocate to Another State: The state laws of an individuals' residence governs the transfer of assets after death. While your existing Will may be recognized in your new state, each state has different laws pertaining to probating that Will, and for transferring property.
4. Finances Change: Whether you just got a big job promotion or you inherited some money, as your financial situation changes, so do your estate planning needs. As your wealth increases or deceases, different tax saving strategies may be available to you. Your plan may need to be modified to a more or less complex financial situation.
5. Health Changes: As your health changes, you should review your designation of guardian, consider if long term care insurance is right for you, and consider how your assets may impact your Medicare or other government resources eligibility.
6. Family Business: As an owner of a family business, it is important to consider how you plan to transfer ownership of that business and who may be ready and willing to step in your shoes when the time comes.
7. Retirement: This is an excellent time to review your estate plan to ensure your it is working for you as you go from building income to living off of retirement funds.
8. Death of a Loved One: After the death of a loved one, it is important to review your estate plan as your potential beneficiaries, executors, or financial situation may have changed.
9. 5-10 Years: As a rule of thumb, it is a good idea to review your Will and estate plan at least every 5 to 10 years. While in many cases, changes may not be necessary, this is a good habit that enables you to address any gradual changes and spot any red flags such as adverse changes in the law.
10. Major Life Event: Any time you experience a major life event, it is a good idea to review your estate plan, as these events may impact both your desired beneficiaries and financial situation.
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