Estate planning can be a practical way to ensure your loved ones are cared for when you’re no longer around. But a good estate plan isn’t one-and-done. You’ll want to review and update your estate plan with life changes, like if you’ve switched a universal life insurance policy to term life or have had an addition to the family due to the birth of a new child or grandchild. Here are seven times it makes sense to review and update your estate plan.
A change in your relationships
You may need to update your estate plan if you’ve had a new marriage, domestic partnership, or common law marriage. Divorce can also necessitate updating your plan. Modifying your estate plan after a relationship change can ensure that the people you want to have in your plan are included and those who you don’t want in your plan are removed.
A desire to plan for future generations
You’ll likely consider leaving a financial legacy for children and other dependents under your care. But be sure you also consider grandchildren and subsequent generations. When you review your estate plan with those people in mind, you can decide how much you want to leave and whether you’ll allocate those funds for a specific purpose, like education or housing.
An update to beneficiaries
You’ll want to update your estate plan with any changes to beneficiaries. Whether you want to designate a new beneficiary, remove someone, or share some of your estate with a charitable organization, beneficiary changes are a valid reason to update your plan.
A change to insurance coverage
As your family and income changes, you may decide to update insurance coverage, including policies like whole life insurance. Some policies may include a death benefit after you pass, so if you take out a new policy or the terms of your existing policy change, it may necessitate updating your estate plan accordingly.
A new legal situation
Depending on where you live, there may be state-specific and tax laws related to estate planning. If you move to a new state or another jurisdiction within your existing state, consider researching any relevant legal changes alongside a supportive legal professional.
A modification to trusts or wills
You may need to review and update your estate plan if you have a living will or a trust that adds or removes beneficiaries. Similarly, if you receive an inheritance, you may also need to factor those funds into your plan.
A newly created business
If you become a business owner, you may want to put a succession plan in place for your business. Upon doing so, you’ll also want to update your estate plan with those wishes and succession directives. This could help you to have peace of mind that even when you are gone, your business will be in the trusted hands of your beneficiaries.
Feel secure in your planning
As you make changes to your estate plan at each life milestone, you can enjoy the security of knowing your plan reflects your wishes. Intentionally putting thought into your plan and ensuring it stays up to date means your designated beneficiaries can fulfill your wishes once you’re gone.
Disclaimer: The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value will reduce the death benefit and may affect other aspects of the policy.
