When is it necessary to review or change my estate plan?

We live through many life events and we want our estate plan to reflect us. An estate plan usually consists of a will, durable power of attorney, advance directive, and healthcare proxy. Individuals may add or subtract or amend these documents as they prefer. It’s best to review or make changes to your estate plan as various things change in their lives. Failure to make changes can result in unintended consequences where wishes may not be carried out and leave a person vulnerable. Here are some instances when an estate plan may need to be changed:

the-best-time-to-review-or-change-my-estate-plan

Marriage or Divorce

If you recently got married, you might want to change your will to accommodate your new spouse and any future children you two might have. Many people assume that if they have no will then everything will go to the surviving spouse, but this is often not the case. Some states have laws that stipulate the spouse can only receive one-third of a life estate in real property and a certain share in personal property owned by the decedent. By not planning ahead, a spouse may be left with little support if their spouse has an untimely death.

If you want to provide for a long-term partner, your wishes should be in writing in a will or trust because the law, unfortunately, does not normally provide the same protections for partners as it does for married spouses. In addition, if you want your partner to make healthcare decisions on your behalf, that information should be in writing on a healthcare proxy form.

On the other hand, if you recently got divorced, it is highly recommended you review and make necessary changes to your estate plan. Some states could automatically nullify your spouse’s share if you die after getting divorced but before changing will. However, this is not the law in all states. In addition, life insurance companies or retirement account holders may not have the same or a similar policy in place. Instead, they may simply grant the proceeds to whoever is listed on the beneficiary designation form.

Death of Spouse

It is common for individuals to name their spouse to inherit everything if they die. However, if their spouse, unfortunately, dies first and no contingencies have been made to account for this possibility, then the will may not be helpful. In addition, many individuals name their spouse as their agent for a power of attorney and healthcare proxy. They may also have named their spouse as a trustee if they established a trust. In the unfortunate event where your spouse passes before you, your estate plan will need to be amended to name someone else as your beneficiary, agent, trustee, etc…Just as you would plan ahead for yourself and your spouse, it is highly recommended that your spouse do the same so you two can avoid unintended consequences.

Having a Child

Another important life event that warrants a change in an estate plan is having a child whether it is through birth, adoption, or fostering a child. It is vital to nominate a guardian in an estate plan so someone can take care of your child or your children if something happens to the testator (you). Having a grandchild may also be a time to rethink your estate plan by considering how to divide up a portion of the estate so that your grandchild stands to inherit. 

Change in Estate

An estate plan might need to be updated if there has been a significant change to the estate, like a significant change to real estate property or the value of the estate. You may need to reconsider how you want to divide your property given this new information. Similarly, if you anticipate coming into a large sum of money through a gift or inheritance, you may wish to update the will to account for this increase.

Change of State

If you decide to move to another state, your will could still be valid in the new state. However, state laws do vary in regards to estate planning law. Several states will recognize a will that was made in another jurisdiction so long as it was made in a valid fashion. But to be safe, you might want to change your will and other estate planning documents if your state of residence changes or at the very least review it with an attorney to see if any changes need to be made.

Worsened Medical Condition

If the testator receives a diagnosis of a terminal or degenerative illness, they may want to move quickly on updating their estate plan. However, a person can only make changes to a will or a power of attorney if they have the capacity to do so. For example, if an individual is diagnosed with dementia or Alzheimer’s, depending on the progression, they may not be mentally capable of signing any documents declaring their wishes. This is why it is crucial for individuals to make and/or review their estate plans as early as they can. 

Change of Heart

Lastly, individuals may simply change their minds over time about who they want to inherit from them (beneficiaries) or who they want to serve in a trustworthy role (agent or trustee). Life events like the ones listed above may impact someone changing their minds and lead them to amend their estate plan. 

If you would like to review or make changes to your estate plan, contact the Law Office of Inna Fershteyn at (718) 333-2394 for expert legal advice.

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