When Is the Right Time to Update Your Will or Trust

Creating a will or trust is a critical step in ensuring that your assets are divided according to your wishes after your death. Despite its importance, many people overlook how vital it is to update these documents regularly. Life is constantly changing, and such shifts can greatly affect your estate plan. This post will highlight the key moments when it may be appropriate to update your will or trust.

Major Life Events

Significant life events often signal the need to update your will or trust. Consider the impact of marriage, divorce, the birth of a child, or the death of a loved one. Each of these events can change your priorities and the way you wish to allocate your assets.

For example, getting married may prompt some to include their new spouse in their estate plans, while others may want to keep assets separate. In the U.S., many marriages end in divorce, and if you find yourself filing for divorce, it maybe advisable to remove your ex-spouse from your will. Furthermore, with millions of births annually, many new parents reevaluate their estate plans to ensure their children are protected.

Changes in Financial Situation

Another vital reason to update your will or trust is a shift in your financial situation. This could involve acquiring significant assets, like a new home, an inheritance, maturing investments, or a decrease in income or wealth.

If you've gained wealth, such as selling a successful business, perhaps it’s time to revisit your estate plan. Conversely, if your financial situation worsens, you might want to adjust who benefits from your estate or the amounts designated for each beneficiary.

Changes in Relationships

Your relationships can shift over time, impacting your estate planning. If you have a rift with a family member or friend, you may want to rethink their role in your will or trust.

Additionally, if new friendships or partnerships develop, you might consider including these individuals. It’s important to ensure your will or trust accurately reflects your current desires regarding who manages and receives your assets.

Changes in Laws

Laws governing estate planning can change, making it critical to stay informed about any new regulations potentially affecting your will or trust. For instance, changes in federal or state tax laws can directly impact how your estate is taxed after you pass away. Regular reviews with tax and legal professionals can help you stay current on such changes.

Moving to a Different State

Moving to a different state, may prompt a review of your will or trust. Each state has unique laws about estate planning, and what was valid in your old state may not be valid in your new home estate.

Updating your estate plan to align with your new state's laws will help avoid complications for your beneficiaries. Consulting with an estate planning attorney in your new state can give you peace of mind regarding whether the new state's law may affect your current estate plan.

Changes in Your Wishes

Your preferences regarding your estate can change over time. You may have new ideas about how to distribute your assets, charitable giving, or who should serve as your personal representative or trustee.

Regularly evaluating your will or trust allows you to make necessary adjustments that reflect your current wishes. It's vital that your estate plan synchronizes with your evolving values and intentions.

Take Action for Peace of Mind

Updating your will or trust is a key component of effective estate planning. Major life events, changes in your financial situation, shifts in relationships, evolving laws, moving to a new state, and changes in personal wishes may signal the need to review your estate plan.

By proactively updating your will or trust, you can ensure that your assets are distributed according to your current intentions and that your loved ones are cared for. Taking the time to review and update your estate plan can give you peace of mind, knowing that your wishes will be honored when the time comes.