Creating an estate plan is not a one-and-done activity. Your estate plan needs to grow, change, and evolve as your life does.
While a general rule of thumb is that you should update your estate plan every five years, there are other life changes that should prompt you to sit down with your estate planning lawyer so you can make updates and changes.
Having a Child
Having a child or adopting a child has two implications. First, you’re adding a new potential beneficiary to your estate plan. Second, for the first eighteen years of that child’s life, they will need you to make plans for their care and guardianship if something happens to you.
If you have stepchildren, you need to consider whether and how you will provide for them in your estate plan as well.
Changing Your Marital Status
Getting married and getting divorced both create massive changes to the way that you may want to handle your estate in the future. You’ll need to remove your ex and add your new spouse.
If you have an unmarried partner you wish to see cared for, then you can include them in your estate plan, even if you never get legally married. But you will have to take special steps to make it happen.
Major Financial Changes
Have you started a business that took off? Did you experience a major windfall? Did you purchase a house or buy a second property? Have you created a piece of intellectual property, like a software program or a creative work, that is now generating an income?
Adding any complexity to your financial situation should prompt you to sit down with an estate planning attorney.
Health Issues
If you get diagnosed with a terminal illness or an illness where the prognosis is poor it’s time to update your estate plan right now. You need to know that both your death plan and your long-term care plan are firmly fixed in place.
Obviously, you hope to get better, and we, your attorneys, hope you get better as well. But it’s still a good idea to make sure your estate plan reflects today’s reality.
Retirement
Ideally, retirement planning was part of your estate planning, but you should still sit down with your attorney when you’re ready to pull the trigger. This will help ensure that the entire process goes smoothly.
This is also a good time to add or remove beneficiaries, and to ensure the beneficiaries of certain estate planning vehicles, like annuities, are up to date.
Moving
Any time you move to a new state you need to update your estate plan. This is to ensure that your plan is in line with state laws and to ensure that it will be executed appropriately.
What You Can Do With an Effective Estate Plan
The main goal of having a comprehensive estate plan in New York is to protect families and their assets. It is important to start planning the future in order to make sure that your assets are distributed according to your wishes and that your loved ones are protected even after unexpected events happen.
A comprehensive estate plan involves creating a Will or a Trust. These two are some of the most important estate planning tools that will help you establish who will inherit your assets and when that person should receive the assets. Having a Will or a Trust in place will allow you to give assets to certain heirs once you pass away or become incapacitated. A Trust can also let you choose to give your beneficiaries assets when they reach a specific age or choose to support them for the rest of their lives. An estate plan can also support a child with special needs.
If you have a well-prepared estate plan, your family may be able to avoid Will contests or costly court battles. These court battles can be expensive, draining your estate and causing financial ruin to your loved ones.
Federal and state estate taxes may also greatly impact the value of your assets that are eventually passed on to your heirs. A good estate plan can reduce or even eliminate estate taxes altogether.
Furthermore, having an Asset Protection Trust allows you to protect assets ahead of any long-term medical needs. This allows your hard-earned money to be passed to your loved ones without any risk of spending it.
Lastly, the Power of Attorney and Health Care Proxy, also known collectively as Advance Directives (or simply “Plan of Incapacity”) can be an integral part of your estate plan. These directives allow you to prepare ahead for the eventuality of your incapacity. You can make arrangements ahead of time and name trusted advisors to help you.
Get Help Today
These life events aren’t the only ones that should prompt you to change your estate plan. There are others. It’s easy to forget estate planning, which is why we recommend that 5-year check-up…this can help ensure you catch changes you might have forgotten to make at the appropriate time.
Need help updating your estate plan? Haven’t built one yet? Contact our law offices to get help today.
See also:
Who Decides if a Long Island Resident is Incapacitated?
How to Create a Long-Term Care Plan for Long Island Residents
