Estate planning ensures the proper distribution of your assets when you pass away. Many people can have estate plans for years with no adjustments.
Over time, your circumstances may change, prompting the need for an overhaul in your estate plan.
Life changes and updates
Life is ever-evolving, with changes in marital status, the birth of children or grandchildren or the loss of loved ones. It is imperative to update your estate plan to reflect these changes accurately. Ensure that your plan aligns with your current family structure and relationships.
For example, New Hampshire has a divorce rate of 3.1 divorces per 1,000 people. If you had a spouse when you made your original will but the two of you are no longer together, that is a significant change.
Your assets can change a great deal over the years. Reassess your estate to account for new properties, investments or valuable possessions that your original plan might not include. This ensures that your estate distribution accounts for everything you own.
Be vigilant about reviewing beneficiary designations on accounts such as retirement plans, life insurance policies and bank accounts. Ensure that your chosen beneficiaries are still in line with your wishes and consider their changing financial situations.
In the digital age, do not forget about your online presence. Include instructions for your digital assets, such as social media accounts, online financial accounts and digital photo libraries, in your estate plan.
If you have minor children, designate guardians in case something happens to you and the other parent. Reevaluate your choice of guardians periodically, taking into account the children’s ages and the selected guardian’s willingness and ability to take on the role.
Health care directives
Health issues can arise unexpectedly. Make sure your health care directives, including a living will and a durable power of attorney for health care, are up to date. Review your choices for a health care proxy who can make medical decisions on your behalf if you become unable to do so.
Executor and trustee selection
The individuals you choose to handle your estate’s administration are pivotal. Assess whether your executor and trustee choices remain suitable, considering their age, availability and willingness to take on the responsibilities.
If charitable giving is an integral part of your estate plan, review your chosen charitable organizations. Ensure that they still align with your values and update your bequests accordingly.
Ensure that your estate plan addresses any outstanding debts, including mortgages, loans or credit card balances. Decide how your estate will settle these debts to avoid complications for your heirs.
Tax laws change over time, impacting estate planning strategies. Stay informed about the latest tax regulations and consult with financial professionals to minimize potential tax burdens on your estate and beneficiaries.