The New Year is the time for New Year’s Resolutions. Lots of people woke up on January 1 to proclaim plans to exercise or eat healthier, but many people forget that their estate plans also need a “workout” from time to time. This year, in addition to hitting the gym or dusting off the old scale, we encourage our readers to review their existing estate plans to see if any changes need to be made. Staying current with your will, trust, and other estate planning tools will ensure that your wishes and goals are still being met.
Many people think their estate plans are set in stone after the ink dries on the signature lines, but that is hardly the case. Circumstances may require changes to wills, trusts, powers of attorney, and other documents that were created in the past. Consider the following developments that might require a change to an estate planning instrument:
- The Birth or Adoption of a Child: Many people create wills and other plans before they have children, so their existing estate plans do not contemplate the care for a minor child. Similarly, people who once felt comfortable with the default provisions of intestacy might want more control after a child joins the family. If you’ve recently had a child, you may wish to amend your existing plans to ensure that a guardian has been appointed for your child or that your assets will be managed for the child’s care.
- Starting a New Job: With new jobs come new benefits and opportunities. If you recently started a new job, you may have life insurance, 401k, or stock benefits that could impact your estate plan. Similarly, your change in income might have implications on your federal income taxes and the size of your estate. It may be helpful to amend your estate plan after determining how these benefits will impact your existing plans.
- Purchasing a New Home or Other Assets: Whether you’ve bought a new house, a new car, or a valuable antique, new assets should always be accounted for in your estate plan. Take an inventory of your home and consider what you’ve acquired since you last updated your estate plan; if you have new and valuable assets, a change might be needed to ensure that your property is appropriately distributed upon death.
- Getting Older: Many things in life can be controlled, but time is not among them. With another year behind us, the new year is a good time to take pause and ensure that basic provisions for health care and estate management are a part of your estate plan, including financial powers of attorney, advance directives for health care, and living wills. If you already have these instruments, review your documents to make sure that your agents are still up to the task and capable of acting on your behalf when necessary. These simple documents will give you peace of mind in the new year.