Do You Need to Update Your Estate Plan?August 24, 2021 By The Sterling Law Group
Once you have an estate plan, your job is not done. If you experience any type of life change involving your beneficiaries or property, you will need updates. Speak with an estate planning lawyer today.
Too many people allow their initial bequest plan to stay in place unchanged throughout the course of their lives. This can render some provisions of a will or trust invalid or allow an unfavorable designation of power of attorney. If you are in California and looking to update your plan for your estate, reach out to a lawyer who can assist with this process. A lawyer can identify where change might be needed and help to implement it properly.
When your life changes, so should your estate plan
Your estate plan is an important element of your overall life plan, as it determines how your life’s work and the belongings and assets you established over your career and beyond are distributed when in need or upon passing. If you pass without a will, state law determines who gets your property based upon their relationship to you.
In addition, significant changes in your life circumstances call for a revisit to your estate plan. Ensure it is still appropriate and valid. Understanding the complexities of wills and trusts can be difficult, particularly when substantial life changes are demanding your attention in other areas. As with divorce, when undergoing estate planning, a lawyer advocate goes a long way in preserving your peace of mind and optimizing the outcome of your situation.
Reasons to update your estate plan:
- Change in marital status
- Retirement from work
- The purchase or sale of significant assets
- Changes in living situations
- Long-term care arrangements or changes
Changing Your Estate Plan if You Have a Child?
Your estate plan changes could come with exciting moments like a new addition to your family. Speak with an estate planning law firm if you need to create or update your documents for a new child.
The Benefits of Having a Will and a Living Trust
If you have a will that directs how your children will inherit your property, then you must add the new baby to your will. You can also set up a trust for your child, or if you have more than one child, you can address all of them in your trust. Your will and living trust work together to distribute your property to your child or children. Directed and in accordance with the rules and laws on trusts in California.
Guardianship of a Minor Child
In some cases, it may become necessary for decisions affecting the welfare of your child to be made by someone other than yourself, and this is often the case if you become incapacitated or pass away, and the child’s other parent is not available either. In that situation, then looking ahead, it is essential that you document a guardianship request for your child. You can have one guardian for your child’s care, one for their finances, or the same one for both.
Add a New Child to Life Insurance and Other Accounts
You might want to add your new child as a beneficiary to any applicable family assets and protections. For example, you can modify your financial accounts to reflect the new addition to your family. All assets you own, such as life insurance policies and 401(k) plans, provide for naming primary and secondary beneficiaries. Although your spouse will typically be your primary beneficiary, it is advisable to have your child named as the secondary beneficiary in the event your spouse also is deceased.
When your intended beneficiaries change, so should your estate plan
One of the worst things that can happen is fighting among the family because the estate plan was unclear. Should your desired beneficiaries change, or if a change in your life circumstances subtracts or adds new beneficiaries, it is important that your bequest plan likewise be updated. This could happen with a falling out with a friend, the passing of a close relative, or the birth or adoption of a child, among other circumstances.
To ensure that your estate plan accurately reflects your current desires. It is a good idea to revisit your estate plan every couple of years with an attorney. Determine if it still meets with your preferences at that time. Keep in mind that, as reported in Forbes, while California does not have an estate tax, there are other taxes due on both the state and federal level for inherited assets, highlighting the importance of an estate lawyer to help you.
Do You Have a Trustee?
It is advisable to have a living trust and will even before your child is born. A will prevents others, including California courts, from making decisions about how your assets will be shared upon your death. Rather, if you have a will, you get to make those decisions yourself prior to your death.
A living trust names a trustee who takes your place in making decisions about your property before and after your death. This can help your family members avoid probate regarding most of your property. It is imperative that you have such documents in place before your child is born or soon thereafter.
Contact an Estate Planning Lawyer from Sterling Law Group Today
If this article has helped you decide that, yes, it is time to update your plan for your estate. Reach out to The Sterling Law Group so that one of our experienced estate lawyers can assist you. Call (916) 790-0852 or go online to book your consultation today.