No matter your age, the time will come when you leave your estate to someone. SmartAsset.com reports that retired Americans leave an average of $177,000 to their beneficiaries. That is a sizable sum, so you want to ensure your estate plan reflects your current wishes. Learn how often a will or trust should be reviewed and life events that warrant an update below. Then, speak to our Crystal Lake estate planning lawyer at Bruning & Associates to get started on your estate plan or updates.
How Often To Review Your Estate Plan?
Estate planning professionals report you should review and revise your plan every three to five years. You also should update it to reflect significant life changes such as birth, marriage, or divorce. Keeping your estate plan up to date ensures that all critical documents reflect your current desires and that everything complies with the law. In addition, regularly reviewing your plan reduces the chances of a contested will or confusion about your wishes when you pass.
Whether you have a simple or complex estate, you should have your estate planning attorney review it regularly. Some believe the estate will be appropriately distributed if they have an up-to-date will. However, laws vary from state to state regarding which legal documents may take precedence over what is listed in the will.
For example, the state may have to decide who gets the funds if your will states your 401k goes to your spouse, but the 401k has your ex-partner listed as the beneficiary. Unfortunate and contentious situations such as this can be avoided by regularly reviewing and updating your will or trust.
Some of the appropriate times to update your will or trust include the following:
When you are married, you probably want to put your spouse as the beneficiary of your investment and retirement accounts. Also, you should use your spouse as your durable power of attorney if you cannot make financial decisions. It is also wise to make your spouse the executor of your estate or trustee if you have set up a trust.
It is essential to update your estate plan after a divorce. The last thing you want is for your assets to go to your ex-spouse against your wishes. Unfortunately, there are many cases where a person passed away and it was discovered too late that their ex-spouse was left as a beneficiary in the will.
If you have children, many key estate planning decisions must be considered. Each of them should be part of estate planning documents. For example, you need to name a guardian for your child if something happens to you and the other parent. Also, think if you want your child to get some of your assets when you pass away. At what age should your assets pass to the child? You also should update your estate plan after you adopt or give birth to a child. Finally, remember to put your stepchildren in the estate plan if you want them to receive some of your assets.
Changes In Health
If you or your spouse are experiencing a decline in health, it is a vital time to go over your estate plan. You should ensure that everything in your estate planning documents follows your wishes. Who will inherit your assets after you are gone? A health situation is also a good time for your attorney to review every piece of estate planning documentation. Having the plan reviewed during this time will reduce concerns about leaving your family with the problem of figuring out your estate after you pass away. This provides your family with additional piece of mind; they will not be attempting to deal with difficult financial and legal issues while grieving.
Changes In Tax Laws
If you move out of Illinois to another state, it is vital to ensure the estate plan follows the laws of the state you move to. It is ideal to retain an estate planning attorney who practices in the new state, too. You should check your estate plan for tax compliance every two or three years. Then, your estate attorney will be well-informed of new tax laws.
Changes In Beneficiaries
If you make an update to your beneficiaries, you also have to update all relevant estate documents. When you change the beneficiary on your retirement plan, updating the estate plan and plan provider is also critical. All legal documents must reflect your wishes, so there is no confusion after you leave. If a beneficiary dies, you should update the estate plan with a new beneficiary.
Large Financial Changes
Do you own a business, real estate, or investments? Your estate plan should be updated if a significant change in value is positive or negative. Likewise, any time there is a substantial change in wealth, it may be time to change how assets are allocated in your estate plan.
Further, updates may be needed if you have bought or sold a significant asset. For example, if you purchased an investment property near Three Oaks Recreation Center in Crystal Lake and it went up in value, you may need to make changes to your estate plan.
Contact Our Crystal Lake Estate Planning Lawyer
Writing an estate plan is an excellent first step to protecting your assets. However, your estate plan should be reviewed regularly to see if updates need to be made. The life events highlighted above are a few examples of when you should have your estate plan reviewed. However, you should always have these critical documents drawn up and reviewed by a qualified attorney. The Crystal Lake estate planning lawyers at Bruning & Associates will review your estate plan carefully and update it based on your changing circumstances.
Our estate planning attorneys are pleased to serve Crystal Lake, Schaumburg, and Chicago. Our attorneys also represent clients in our Warrensville, Naperville, Lake Forest, and Saint Charles offices. Please contact our Crystal Lake estate planning attorney today to review your estate plan at (815) 415-3000.