One of the biggest mistakes you can make when it comes to your estate plan is to let your estate planning documents become outdated. Now, most people will create their estate plan, sign the documents, and file the documents away never to look at them again.
For many, this does not present a problem, especially if the person remains single their entire life, doesn’t own much property and doesn’t come into a large inheritance. However, the majority of people who create an estate plan should review it periodically to ensure that the documents have not become outdated based on where the person is in life at that moment.
Estate planning documents are so important that you should review them every so often and always immediately after a major life event. Life events that should trigger an estate planning document review include the following:
- The birth of a child
- Inheriting a large sum of money
- Receiving a major promotion or raise at work
- You got divorced
- You got remarried
- Someone named in your will or other estate documents passed away
- You moved to a new state
- Relationship with a power of attorney or trustee has ended
The above is not an exhaustive list. You can review the documents in your estate plan as often as you’d like or after any type of life event you experience. It’s important to note that you should always review these documents with an experienced estate planning attorney in order to make sure that they are updated correctly.
Estate planning documents can become outdated in relation to beneficiary documents, asset ownership documents, and powers of attorney.
One of the most common ways in which estate planning documents become outdated is through beneficiary documents becoming outdated. A will does not have an impact on who inherits your assets like IRAs, life insurance, and annuities.
All three of these assets must have beneficiary documents signed and dated by you, naming who will receive these assets upon your death. If the beneficiary documents have expired, or you have not changed them based on your life right now, then the original person named will receive your assets upon your death.
Another way in which an estate plan becomes outdated is when you fail to update the ownership of an asset. It’s possible that you own assets solely and jointly with your spouse, a friend, or an adult child. As you age, and as your life changes, you should review these documents to ensure that any jointly owned assets don’t need to be changed before it’s too late.
Every estate plan should have at least two powers of attorney in it: one for your financial matters and one for your medical matters. You will more than likely need the medical power of attorney before your will. Many people either do not name powers of attorney or fail to update who is named as power of attorney in their estate plan.
If there have been changes in the laws that govern estate planning, you should have an attorney review your plan and make the necessary adjustments so that the plan reflects these changes.
If you need to create an estate plan or have your current one reviewed, it is in your best interest to speak with an estate planning attorney from Power Law Firm LLP at your earliest convenience. Contact our office to schedule a consultation with a member of our team. Estate planning helps secure your future and the future of your family upon your death. Protect your assets and your loved ones with an updated estate plan.