If your life changes for reasons like death, divorce, marriage, or birth, you should make sure to update your estate plan. Unfortunately, while many people appreciate the importance of updating their estate plans, a large number of people fail to do so. While it is tempting to think of written documents as written in stone, in reality, estate planning is an evolving process. After undergoing several life changes, some people find that the terms of their estate plan have changed so much that they no longer fit the creator’s situation. Reviewing your estate plan every few years is one of the best ways to ensure that your needs and goals are met.
Review Distribution Terms
To make sure that your asset distributions goals are satisfied, you should review the terms found in your last will and testament or revocable trust. These estate planning documents address how your assets will be distributed at the time that you pass away. As your children age, these provisions might need revision based on the particular facts of each child’s circumstances. For example, one child might have special needs or another child might have a gambling addiction and would have a difficult time preserving assets.
Make Sure Your Trust is Funded
If you create a revocable trust, you should routinely review both the trust’s dispositive provisions as well as trust funding. While it might sound easy to avoid, one of the most common estate planning errors is failing to fund a revocable trust. Trusts are established to avoid probate as well as to create a process under which assets are managed in case a person passes away or becomes disabled. A revocable trust only controls assets that are titled in the name of a trust. Consequently, it is a good idea to make sure that your assets have been retitled in the name of the trust or that the assets have an appropriate beneficiary designation to transfer assets to the trust at the time that you pass away. If you have gained assets since you initially funded the trust, you should make sure that the new assets are adequately titled in the trust’s name.
Consider Revising Relationships
It is a good idea to review the provisions in your last will and testament as well as your revocable trust that lists who you have appointed to resolve matters for you. Various changes including death or changes in your relationship with involved parties should make you contemplate whether a change to the individual previously named is justified. Some of the relationships that you might have to revise include:
- An attorney-in-fact who will act on your behalf to make financial, legal, or personal decisions if you become incapacitated
- Executors who will both administer and manage your estate
- Guardians who have the authority and responsibility to care for your minor child
- Health care agents who will make medical decisions on your behalf if you end up incapacitated
- Trustees or entities who administer and manage a revocable trust when you no longer can do so
Contact a Knowledgeable Estate Planning Lawyer
If you have questions or concerns about how to change your estate plan, you should not hesitate to contact an experienced estate planning attorney. Contact Attorney Jim A Lyon today to schedule a free case evaluation.