At any time, you can update your estate plan. It is often recommended to update an estate plan every three to five years. However, there may be occasions when you need to alter your estate plan sooner than this.
Here are a few reasons an estate plan may be altered:
Adding a trust to protect assets
Many estate plans can benefit from a trust. A trust is a legal arrangement where a trustee is responsible for distributing assets as per the grantor’s instructions. With a strong trust, an estate may be able to avoid estate taxes, probate and disputes. Some trusts even allow grantors to add unique language that can control how and when their assets are distributed.
Changing a beneficiary, executor or power of attorney
Over time, a beneficiary, executor of the estate or power of attorney may need to be changed. This can happen if one of these positions opens after someone passes away or simply because a testator no longer wishes for them to be involved in their estate. This can happen, for example, if a testator divorces a spouse that was named as their power of attorney.
Naming a guardian for your child
Having a child can greatly change the intent of an estate plan. Not only may a testator name their child as a primary beneficiary of a will or trust but a guardian may be established. A child guardian could care for a child’s needs in place of their parents if their parents experienced a sudden death.
Complying with state laws
Many estate plans need to be altered because the testator moved to a new state. Each state has unique estate planning laws.
If you are considering making changes to your estate plan, you may need to reach out for legal help to learn about your options.