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When should you update your estate plan?

On Behalf of | Dec 6, 2022 | Probate & Estate Planning |

An estate plan is an integral financial move, yet overwhelming. It can be hard to make plans for your assets or family when you are incapacitated or die. But it is necessary as it offers noteworthy benefits.

Even after drafting one, you need to review your estate plan regularly. This guide discusses some important times that warrant an update to your plans:

Changes in your family

Your estate plan is created based on current conditions, including family members. But this may change in the future. If this happens, update it in your plan. This includes the birth or adoption of a child or grandchild, a child or grandchild becoming an adult, marriage, divorce, sickness or death. You may also want to disinherit or reduce the inheritance of a member who has proved gross mismanagement of assets. 

Career changes, such as job promotions, getting a new job or the opening or closure of a business, also affect your family’s finances. Thus, you need to update them in your estate plan.

Changes in assets or liabilities

If your estate’s value considerably increases or decreases, probably after selling or acquiring an asset, you need to update your plan. Review how the assets have been divided among beneficiaries and adjust as a result. 

Change in the tax laws

Federal and state laws concerning estates, especially on taxes, usually change. When this happens, you will need to review and update your plan. For instance, the Internal Revenue Service (IRS) stated that for the tax year 2023, decedents during the year have a basic exclusion amount of $12,920,000. Thus, you will need to make the changes accordingly with legal help. And do the same based on laws that change in the coming years.

A significant percentage of Americans don’t have an estate plan yet. However, it will help to create a professional one sooner and update it when change happens.