Estate planning is an ongoing process that will stretch the entirety of your lifetime. Consistently maintaining your plan will enable it to function the way you intend.
Forgetting to update your plan can have detrimental consequences that jeopardize its value. Knowing when to modify your strategy can help you preserve its purpose despite the progression of your life.
Changing family dynamics
One of the most common reasons to update your estate plan is due to changes in your family’s dynamic. This can include marriage, divorce, remarriage, adoption, death and discord. Each of these situations could impact your list of beneficiaries and require you to remove or add names.
Moving across state lines
Another factor that could impact your strategy is if you move from one state to another. Depending on the type of strategies you have in your plan, different states could have unique laws that will require adaptation. Even if your move did not have an impact on your plan, CNBC suggests updating your estate strategy every few years to keep things intact.
Accumulation of assets
An estate plan gives you a place to carefully account for each of your assets. You can document what you have, each item’s value and how you plan to distribute it at the time of your death. A substantial increase in the value of your assets will require updates to your plan. Such an increase could happen as the result of a job promotion, growth in an investment portfolio or accepting an inheritance.
Regularly reviewing your plan could help you identify areas where you can tighten things up. Your consistent effort will effectively improve the outcome of your estate plan and optimize its benefit for your heirs.