A Guide to Keeping Your Estate Plan Up to Date
Maintaining an up-to-date estate plan is crucial to ensure your wishes are honored and your loved ones are provided for after your passing. Estate planning encompasses a range of legal documents, including wills, trusts, and powers of attorney, designed to manage your assets, minimize taxes, and designate guardians for your dependents.
However, your initial estate plan is not a static document; it needs to evolve with your changing circumstances. Regular updates are essential to ensure your estate plan remains aligned with your current needs and goals.
Understanding Estate Planning
An effective estate plan typically includes several key components:
- A will outlines how you wish your assets to be distributed and appoints guardians for minor children.
- Trusts can manage and protect your assets, often minimizing estate taxes and avoiding probate.
- A power of attorney grants someone the authority to make financial decisions on your behalf if you become incapacitated.
- A healthcare proxy designates someone to make medical decisions for you when you cannot.
Together, these elements work to protect your assets, ensure your wishes are followed, and provide for your loved ones.
Key Life Events That Prompt Updates
Life is full of changes that can impact your estate plan. For instance, marriage or divorce can affect who you wish to inherit your assets and may require updating beneficiary designations or altering trust provisions.
The birth or adoption of children means you should select someone to be their guardian, and you should revise your plan to include new dependents. Significant financial changes, such as a substantial increase or decrease in wealth, may alter your strategy for asset distribution and tax planning.
Changes in health, such as a serious illness or disability, might require adjustments to your healthcare proxy and power of attorney. Lastly, relocating to a new province or country can change the applicable laws, regulations and taxes that may require revisions to your plan.
Regularly Review and Update Your Estate Plan
To ensure your estate plan remains up to date and effective, it is recommended that you review it at least every 3–5 years. This can help address any major changes in your life and ensure your documents are still relevant. Additionally, it’s important to review your estate plan after any significant life event or major financial change to ensure your wishes are still accurately reflected.
Regularly reviewing your estate plan involves several steps. Start by consulting with professionals such as estate planning and tax lawyers to ensure that your documents comply with current laws and address complex issues, and to provide insight into tax implications and financial strategies. Communicating with family members about your updated plan can prevent surprises and conflicts, ensuring that everyone understands your intentions and knows where to find your documents.
Tips for Keeping Your Estate Plan Current
To keep your estate plan current, consider setting reminders to review your plan periodically. Use calendar alerts or schedule regular meetings with your chosen estate planning professional. Ensure that your estate planning documents are organized and stored in a secure, accessible location so that they can be easily found when needed. Involve family members in the process by letting them know of the location of your documents and discussing your wishes to prevent misunderstandings and conflicts.
Now in its 40th year, Bloom Investment Counsel has provided investment management services for its clients including high-net-worth individuals and families, and is pleased to work with your trusted estate and tax planning professionals to help protect, preserve and build your wealth.
This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.