I was just reading a legal question-and-answer website about a couple who was dating and wanted to know when they needed to update their wills. The couple has a basic will plan, but they plan on getting married and having kids within the next few years. It sounds like this couple is on the ball and planning in the right direction. I can’t tell you how many people don’t even think about this stuff. I admit it can be dry and boring. But everyone needs to think about an estate plan, and it’s easier than you think to get a plan in place so your family is protected. Here are some major life events that may warrant an update to your estate plan.
You Get Married or Divorced
Probably the number-one major change to any estate plan is getting married or divorced. An estate plan for a single individual is vastly different than one for a married couple. If you are married, you need to plan for you and your spouse. The reverse is true if you are breaking up with a spouse. If you are experiencing life changes, it’s a good time to review your estate plan to make sure everything is in order.
You Have Children
Many people put off estate planning for various reasons, but when you start having children, an estate plan becomes very important. You need to make your wishes known about who will care for your children. You also need to start planning how you will provide for your children in the event something happens to you. Although many good plans have provisions for unborn children, it’s a better practice to name all your children in your estate planning documents so nothing is left to chance. It is very easy to modify your current estate plan to make provisions for any children born after your plan was first created. That way, your plan will continue to serve your current wishes.
When You Buy Real Estate
Perhaps you only have a will and have never gotten around to creating a living trust. When you start buying real estate, that’s the time to create a living trust. With a living trust, your real property holdings are titled in the name of the trust. This will generally save money when it comes time to administer your estate upon your death. Without a living trust, your estate will probably have to go through probate administration.
Trust administrations tend to be much more efficient than probate, as you do not need court permission to administer your estate. If you acquire properties after your living trust is created, it’s easy to title your properties to your living trust at the time you acquire them. You do not have to modify your trust each time you acquire new property. However, it may be advantageous to review your trust documents at least every two to three years to make sure the documents are serving your goals.
Remember, your estate planning documents are living documents that should be growing and adapting to your family’s needs and goals. If your documents are getting that old musty paper smell, it may be time to review your plan to make sure everything is in order.
