The Importance of Reviewing and Updating Your Estate Plan

Many people do not want to think about their mortality and the fact that someday we will all pass away, however, it is important to think about this and have an estate plan prepared for when the day comes. An estate plan typically includes a Last Will and Testament, Health Care Proxy, Power of Attorney, Living Will (also known as an Advance Healthcare Directive), and sometimes a trust. These are all very important documents to have prepared.

One reason to have your estate plan drafted is to create certainty. With an estate plan, you can name who will make healthcare decision for you, in the event you are unable to, with a Health Care Proxy. You can also name someone to conduct your personal business affairs (such as banking, filing taxes, and other personal business) in the event you are unable to do so with a Power of Attorney. A Last Will and Testament provides for who you wish to inherit your property when you pass away. A Will an also nominate a guardian for your minor children in the event you pass away before your children are grown. When you have these documents prepared, then your family members know what your intentions are, which can minimize disputes put before the probate court, which can be costly and take time.

However, once your estate plan is drafted, it is important to review it every few years and update your estate plan, if necessary, to make sure it is still current with where you are in life. There are many reasons why an estate plan may need to be updated. For example, a beneficiary or personal representative (sometimes known as an executor) of your estate may have since passed away, and you would like to name a new beneficiary or personal representative in that person’s place.

Another reason may be because you have divorced or separated from your spouse or significant other, and want to remove that person as a beneficiary of your estate. Many states have a law that automatically disinherits a former spouse from a will upon the finalization of a divorce, but it is still wise to update your estate plan if you are recently divorced or separated. It is especially important, because the health care proxy and power of attorney are not typically affected by this disinheritance statute. Unless you update your estate plan, your former spouse could still potentially be your health care agent or attorney in fact.

Or conversely, you are recently married. Many states have laws that permit a spouse to elect to receive a portion of a deceased’s spouse’s estate, if that surviving spouse is not adequately provided for in the will. This is known as the elective share statute. Once you are married, it is important to update your estate plan to include your new spouse, so there aren’t any disputes or problems based upon the elective share statute. Similarly, if you have just had a child, it is important to update your estate plan to incorporate your child in your estate planning documents, including naming a guardian in your will.

You may also want to update your estate plan if you move to another state. Many people do not realize that the laws of estate, wills, and trusts, are state-specific. Although the laws tend to be similar from state to state, the laws do vary slightly in each state nonetheless. Having an estate plan from another state can sometimes cause headaches when your estate is being probated. Thus, if you are moving out of state, and you plan on residing in the new state for a while, it is wise to update your estate plan.

Finally, having an estate plan in place can save your family potential headaches in the probate process, which can include family disputes as to who should inherit what property.

Having an estate plan prepared is typically relatively inexpensive. By having your estate planning documents in place, you avoid the need for many issues to be submitted to the probate court, which saves time and money. Updating an estate plan is typically equally as inexpensive. Thus, although no one wants to think about their mortality, it is important to ensure a current estate plan is always in place.

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