Major Life Changes Call for Estate Plan Updates
You've worked hard to build a life for yourself and your family. You've bought a home, started a career, gotten married, and had kids. Major milestones like these are exciting, but they're also a cue that it's time to revisit your estate plan. Even if you created a will when you first became an adult, a lot has probably changed since then. Outdated estate plans can lead to family disputes, unnecessary taxes, and assets going to unintended recipients when you pass away. Protect your spouse and children by taking time now to update legal documents like your will, trusts, and beneficiaries. With a few simple updates, you can make sure everything you've worked so hard for goes to the right people. Don't leave major life events up to chance. 
When You Should Review Your Will
Major Life Changes
Getting married, having kids, getting divorced, or entering retirement are all major life events that mean it's time to review your will. If you've recently gone through one of these big life changes, make updating your estate plan a priority. Your current documents may no longer reflect your wishes or account for your new family dynamics. Reviewing your will ensures your assets will be distributed the way you intend.
Move to Another State
If you've recently moved to another state, you'll want to review your will. Estate laws vary between states, so documents created in one state may not be valid in another. Updating your will with an attorney licensed in your new state of residence will ensure your wishes are carried out properly under the correct laws.
Asset Changes
Have you recently inherited money or other valuable assets? Bought or sold property? Had a business take off or go under? Significant changes in your assets mean your will likely needs updating. Be sure to review how your assets are distributed and make any necessary changes to align with your current financial situation.
Time Has Passed
Even if none of the other events apply, you should review your will every 2-3 years. Outdated estate plans often fail to account for new laws, tax codes, and other factors that could affect your beneficiaries. Regular reviews also give you the opportunity to make any minor changes to ensure your will continues to reflect what's most important to you. Keeping an up-to-date will gives you peace of mind that your affairs are in order.
Amending an Estate Plan After Marriage or Divorce
Getting married or divorced are two of the biggest life changes you can go through. And with such momentous events, it’s critical to update your estate plan accordingly.
When you tie the knot, you’ll want to revise your will or trust to provide for your new spouse. Make them the primary beneficiary and give them control over assets and medical decisions in the event of your incapacity. You should also name them as executor of your will or successor trustee of your trust.
It’s also a good time to establish or update financial and healthcare powers of attorney, appointing your spouse to make decisions on your behalf if needed. And review beneficiary designations on retirement plans, life insurance policies, and annuities, changing them to your new spouse.
Divorce
A divorce demands a complete overhaul of your estate plan. You’ll need to remove your ex-spouse as a beneficiary of your will, trust, and financial accounts. Name a new executor, trustee, and agents under powers of attorney. And if you have children, specify a new guardian for them in your will.
You should also close any joint bank accounts, investment accounts or credit cards you shared, and refinance jointly-held debts like your mortgage in just one spouse’s name. Don't forget to update homeowner's, auto and life insurance policies as well by removing or replacing your ex-spouse.
Going through a marriage or divorce is complicated enough without having to worry about your estate plan. Meet with an attorney to review and revise your documents, ensuring they reflect your current situation and priorities. Your future security and peace of mind will be well worth the effort.
Updating Beneficiaries After Major Life Events
Marriage or Divorce
Marriage or divorce are two of the most common life events that call for updating your beneficiaries. If you’ve recently tied the knot, you’ll want to add your new spouse as a primary beneficiary on accounts like your life insurance policy, retirement plans, and bank accounts. Make sure you also name a contingent beneficiary, like your children, in case something happens to both of you.
In the event of a divorce, remove your ex-spouse as a beneficiary as soon as the divorce is finalized. Don’t delay on this, as most states will not automatically revoke an ex-spouse's beneficiary status. If something were to happen to you before you make this change, your ex could end up with the majority of your assets.
Birth or Adoption
Welcoming a new child into your family, whether through birth or adoption, is a perfect time to revisit your estate plan. You'll want to set up a will or trust to name a guardian for your child in case something happens to you and your partner. You should also consider starting a college fund and buying life insurance or increasing coverage on existing policies.
Make sure any new children are named as beneficiaries on your accounts and insurance policies. And if you already have an estate plan in place, meet with your attorney to update and make modifications as needed. Your little one's future security and well-being should be a top priority.
Career Change
A significant career change, like switching jobs or retiring, often impacts your financial situation. It's a good idea to connect with your financial advisor in these cases to make sure your investment and insurance strategies align with this life change. You may need to increase or decrease life insurance coverage, for example.
It's also wise to double check that the beneficiaries on your workplace benefits like retirement plans and life insurance policies are still accurate and up to date. When you leave a job, be sure to either roll over or cash out any retirement accounts to avoid penalty fees. Review your estate plan to make any necessary adjustments to account for changes in your income or net worth. Major life changes require proactively managing how they'll impact your financial well-being and security. Regular estate plan checkups and updates will give you peace of mind that your loved ones will be provided for no matter what life brings your way.
Using Trusts and Codicils to Modify Your Estate Plan
Trusts: Flexible and Adaptable
A trust is a legal entity that can hold your assets to be distributed to your beneficiaries as you specify. Unlike a will, trusts are flexible and can be modified as needed to account for life changes. For example, if you have another child, you can amend the trust to add them as a beneficiary. Or, if your financial situation improves, you can restructure the trust to provide more for your loved ones.
Trusts also allow you to control how and when your beneficiaries receive distributions. For instance, you may want minor children's shares held in trust until they reach a certain age. Or, you can structure the trust so your surviving spouse receives income from the trust during their lifetime, with the remainder distributed to your children upon their passing. The options are many.
Codicils: Simple Updates to Your Will
For small changes to an existing will, such as adding or removing an heir or changing an executor, a codicil may be all that's needed. A codicil is a written amendment to a will that is signed and witnessed just like the original will. It is then attached to and considered part of the will.
Codicils are easy to create but can become problematic if used excessively. It may be best to meet with an estate planning attorney to draft a new will if you need to make substantial changes, such as restructuring how your assets will be distributed or adding provisions for a new spouse or children. They can review your current estate plan and determine if a codicil will suffice or if a new will is the better option to ensure your final wishes are fulfilled.
Regular reviews and updates to your estate plan are crucial, especially following major life events like marriage, divorce, births, or deaths in the family. Don't delay—make the call to your estate planning attorney today to discuss any needed modifications to your will, trusts, or other documents. The peace of mind that comes from knowing your affairs are in order is worth the effort.
Estate Planning FAQs: Answering Common Questions About Wills
What is a will and why do I need one?
A will is a legal document that specifies how you want your assets and estate distributed after you pass away. Without a will, the state will determine how to distribute your assets according to the laws of intestacy. This usually means your estate will be split among your closest living relatives. For most people, especially those with families, not having a will can create unnecessary confusion and conflict. A will allows you to specify who inherits what, name an executor to carry out your wishes, and appoint a guardian for any minor children.
Do I need a lawyer to make a will?
While you can create a will yourself using online templates, it is best to work with an estate planning attorney. They can ensure your will is comprehensive and legally valid. An attorney can also help you with more complex estate plans, setting up trusts, planning for incapacity, and navigating tax laws. The fees for having a lawyer draft your will often end up saving your beneficiaries time, money, and hassle in the long run.
How often should I update my will?
You should review your will every 2-5 years, or whenever there is a major life event. Events like marriage, divorce, having children, retirement, or the death of a beneficiary can all impact how you want your assets distributed. It's also a good idea to revisit your will if there are any changes in estate tax laws. An out-of-date will can lead to assets not being distributed as intended or higher taxes paid than necessary.
What assets are distributed according to a will?
A will only distributes "probate" assets - those that have not already been designated to transfer upon your death to someone else. This includes assets like personal bank/savings accounts, physical property like homes and vehicles, and other valuables. Retirement accounts, life insurance policies, trusts, and jointly owned property pass directly to the named beneficiaries and are not distributed through a will. It's important to keep beneficiary designations up to date in addition to revising your will.
Conclusion
So there you have it - the major life events that call for an estate plan review. Getting married, having kids, getting divorced, retiring, and moving all shake things up enough that your documents likely need some updates. Don't wait until you actually need those estate plans to deal with an emergency or death. Be proactive, chat with your attorney, and get your affairs in order now, while you still can. The peace of mind you'll gain is so worth the relatively small effort. And you'll rest easier at night knowing your loved ones will be provided and cared for no matter what comes your way down the road.
