Estate planning does not stop the moment you create the documents. It’s just the beginning. It is a work in progress. Which is why you must revisit your estate planning every now and then to check if you need to make changes and updates. There are various reasons why you must update your estate plan, such as change of law, financial change and certain family situations. To ensure that your goals are still met by your estate planning, make changes and updates periodically when necessary. Your priorities change, as well as your needs.
Understanding Estate Planning
Basically, estate planning is a way of securing one’s wealth and assets. It is the act of preparing certain documents for the transfer of the person’s assets and how such will be distributed and handled after his or her death. You can include all your assets, debts, personal belongings, vehicles, real estate, pensions and insurance in your estate plan.
There are various reasons and situations that might prompt you to update your existing plan. Basically, there are five stages of life when you must consider updating your estate planning documents. They are as follows:
If you are engaged and getting married, make sure that you meet with your attorney for advice on estate planning. You might need to revisit your estate plan and determine if prenuptial agreement is appropriate. This is vital if you want to secure your assets owned prior the marriage. These assets will not be subject to partition and other action in case of a divorce.
You must also consider creating a will in your estate planning, to ensure that your assets will be passed on according to your wishes. You might already have a will, but want to update it to include your wife or husband. Also, you must also revisit your Health Care Proxy and Power of Attorney if you want to give your partner authority to make decisions on your behalf in case you become incapacitated. Moreover, getting married warrants that you must consider updating your life insurance and retirement plans too. You can update these documents to include your partner as a beneficiary.
With Young Children
Once you have young children, you need to revisit your estate planning to address the custody of your children and the management of the assets that you intend for them.
To address the custody of your children, you need to update your will. In said document, you must name a guardian for the minors. This is to ensure that the person of your choice will be the one to take care of your minor children in case of your death. The guardian will make the necessary decisions for the care and upbringing of the children. This is important because if you don’t update your will, the Court will get to decide who will take custody of your minor children in the event of your death. Aside from the will, in your estate planning you must also visit or create a trust to protect your children’s inheritance. In this document, you will designate a person to oversee and manage the assets for your children if you pass away. This is the best way to keep the inheritance of your minor children protected. This also protects your investments, savings, retirement accounts and life insurance. To be extra sure, include the trust in your estate planning. The assets in the trust will be used for the children’s benefit, such as living expenses, health care, education, and others.
When Children Are in Their Teens and Twenties
Estate planning is important when your children reach teenage years or even when they are already young adults. They are not that mature yet as regards the handling of properties and protection of assets. To efficiently protect their assets from creditors, a trust plan is vital. This is so because these ages are vulnerable to irresponsible money-spending and handling. They may also get into trouble that might hurt them badly financially. Despite these, you can still protect your children’s assets through a good plan. It’s best if you update your existing plan as soon as they reach such age or earlier. You can even ask your child to sign a Health Care Proxy and Power of Attorney as part of estate planning.
Approaching Retirement Age
Usually, when you are approaching retirement age, the value of your estate might be higher. These assets can include life insurance, retirement accounts, investments and bank accounts. It is highly advised that you review your asset’s value as part of your estate planning. Consult your estate planning attorney and discuss about tax matters and other important issues. You might want to include your grandchildren in your trust so you can update your plan too for that. More importantly, you must discuss about long-term plans. Since you are already approaching golden age, you must make sure that your health care documents.
When you have reached the golden years, you have more reason to review and update your estate planning documents. It is crucial that you keep your documents updated and suited to your current situation. Check if the decisions you included in the health care documents and powers of attorney are still appropriate. For example, if your spouse is the designated person and she is already more ill than you, consider replacing her in the aforementioned documents. With estate planning, you can see to it that your assets are well-protected and polish everything to ensure that they are still according to your wishes.
Always remember that estate planning is a continuing process. Better discuss such matters with your attorney to see to it that all the documents are updated and still in accordance with your wishes. For your estate plan needs, contact Dana Law Group today.