Life is rarely static. As you move through its many stages -- marriage, parenthood, career shifts, and more -- your personal and financial circumstances evolve. Each of these milestones can have a profound impact on your estate plan.
Failing to update your plan in response to major life changes can lead to unintended consequences, from assets going to the wrong people to increased tax burdens and family disputes.
“Many Americans don’t update their wills. It’s understandable – creating a well can be a large undertaking, depending on the size of your estate,” says Caring.com.
In fact, according to a 2023 survey, over 60 percent of Americans with estate plans haven't updated them in more than five years, despite experiencing major life events during that time.
Here's why it's crucial to keep your estate plan current and how to approach updates as your life unfolds.
Why Your Estate Plan Needs to Evolve
An estate plan is not a one-time document; it’s a living strategy meant to reflect your current wishes, family structure, and financial situation.
When life changes, your estate plan should change with it. Otherwise, you risk:
- Assets being distributed in ways you no longer intend.
- Loved ones being left out or inadequately provided for.
- Outdated executors or guardians making critical decisions.
- Increased legal complications and potential for disputes.
Major Life Events That Require an Estate Plan Update
Consider updating your estate plan when any of the following occurs:
Marriage or Divorce
- Marriage: Getting married often means new legal and financial responsibilities. Update your will, trust, and beneficiary designations (such as on life insurance and retirement accounts) to include your spouse, ensuring they are provided for as you intend.
- Divorce: After a divorce, failing to remove an ex-spouse from your estate plan or beneficiary designations can result in unintended inheritance. Update all relevant documents to reflect your new wishes and consider revising powers of attorney and executor appointments.
Birth or Adoption of a Child
Welcoming a new child is a pivotal moment. Update your estate plan to:
- Name a guardian for minor children.
- Create or adjust trusts to manage their inheritance.
- Include provisions for their education, health care, and general welfare.
When a Child Turns 18
When children are no longer minors but considered adults, your estate planning should be updated. While a guardian may no longer be necessary, many parents will want to set up trusts to control how their young adult children may come into inheritance funds.
Significant Changes in Financial Status
- Increase in Wealth: Acquiring property, receiving an inheritance, or starting a business can all affect how your assets should be managed and distributed. You may need to establish new trusts, update your will, or adjust tax planning strategies.
- Decrease in Wealth: If your financial situation changes for the worse, you may need to scale back certain bequests or reconsider how assets are allocated to ensure your plan remains realistic and effective.
- When You Retire: Retirement age often comes with significant financial changes, and you will want to update your estate planning to reflect these changes.
Death (or Incapacitation) of a Beneficiary or Fiduciary
If someone named in your estate plan as a beneficiary, executor, trustee, or guardian passes away or becomes incapacitated, update your documents to name new individuals and redistribute assets as needed.
Major Health Changes or Incapacity
A serious illness or disability may require you to:
- Update advance health care directives and powers of attorney.
- Ensure your wishes for medical treatment and end-of-life care are clear.
- Assign new agents if your current appointees are no longer suitable.
Relocation to a New State or Country
Moving can have legal implications for your estate plan, because probate, tax, and inheritance laws differ by state and country. Update your documents to comply with local laws and address property in multiple jurisdictions.
New Relationships or Family Dynamics
Changes in relationships -- such as remarriage, estrangement, or blended families -- may require you to revisit who is included in your estate plan, how assets are distributed, and who is appointed to key roles.
When Estate Laws Significantly Change
Significant changes to estate laws, such as the U.S. estate tax (a federal tax on the transfer of a deceased’s person’s assets to their heirs or beneficiaries) may be a good time to update your estate planning to take advantage of the changes.
The Risks of Not Updating Your Estate Plan
Neglecting to update your estate plan after major life changes can have serious consequences:
- Unintended Beneficiaries: Assets may go to an ex-spouse or exclude new family members.
- Legal Disputes: Outdated documents can lead to confusion, delays, and costly legal battles among surviving family members.
- Tax Inefficiency: Changes in wealth or location can expose your estate to unnecessary taxes if not addressed.
- Lack of Clarity: If your wishes are unclear, courts may decide how your assets are distributed or who cares for your children, rather than you.
How to Update Your Estate Plan
Follow these steps to update your estate plan when life changes happen:
- Review Your Current Documents
- Gather all estate planning documents: will, trusts, powers of attorney, and health care directives.
- Check beneficiary designations on non-probate assets like retirement accounts and insurance policies.
- Identify Necessary Changes
- List recent life events and financial changes that need to be reflected in your plan.
- Update Key Roles
- Reassess your choices for executor, trustee, guardian, and agents for power of attorney or health care directives. Make changes if your relationships or trust in these individuals have changed.
- Adjust Asset Distribution
- Update how and to whom assets are distributed, considering new or removed beneficiaries, changes in wealth, or new property.
- Consult Professionals
- Work with an estate planning attorney and, if needed, a financial advisor. They can ensure your plan complies with current laws and aligns with your goals.
- Regular Reviews
- Even without major life changes, review your estate plan every two years and conduct a thorough update every five years to keep everything current.
Take Control of Your Estate Plan Today
Life's changes won't wait — and neither should your estate planning updates.
Sloan Docs provides a simple, affordable solution for keeping your estate documents current. With our easy-to-use templates for wills, revocable trusts, and essential estate planning documents, you can make necessary updates as your life evolves — at a fraction of traditional legal costs.
Visit SloanDocs.com today to explore our document packages and take the first step toward protecting your legacy and loved ones — no matter what changes life brings your way.