Estate planning is actually one of the most crucial things that most people tend to ignore while they are still alive, not knowing that it may end up making things very complicated for their relatives. Law attorneys that deal with estate planning always recommend that an individual reviews and updates his estate plans every one to three years but it is actually supposed to be more often than this.
If there are eventually unforeseen circumstances, you do not want the administrator or beneficiaries handling your estate to find it difficult. This is one of the major reasons it is advisable to update and review your estate plans once in a while but before we go deep into this, let’s talk about what estate planning is.
What is Estate planning?
Estate planning is a process which includes the collection of documents that determines the management of your estate and what you want to happen to them after you’ve passed away. It covers all your desires or wishes concerning your properties, the beneficiaries and all that should be done if you eventually pass away. Incase you are wondering what an estate is, it is actually your financial securities, assets, possessions and every other thing belonging to you before your death.
Why do you need estate planning?
Most people are with the belief that only the rich can plan for their estate since it would be a large one to handle but this is actually wrong because anyone anywhere can plan their estate with ease. Although, when it comes to issues like probate, the value and size of the estate may determine how long the probate process would be. This still doesn’t change the fact that you need to plan your estate Incase of any unforeseen circumstances but why do you need to do it?
- To protect family wealth
- To make probate process easier for any designated beneficiaries
- To minimize transfer taxes
- To dispose of wealth in the manner you wish
- To prepare for future generations
When is one supposed to make changes to estate plans?
Now that we have already discussed about the whole concept concerning estate planning, let’s go further into the real deal which is about when an individual is supposed to make changes to estate plans.
1. If there’s a new family member (it doesn’t matter if he or she was adopted), then you definitely need to make changes to your will and every other thing related to beneficiaries.
2. If you have moved to another state, you have to do your research and see if the rules concerning estate planning are different incase it might have great effects. Powers of Attorney, wills and even the number of witnesses needed for a Will to be valid, vary from state to state.
3. If there’s a new marriage or a divorce, you may have to designate more beneficiaries to your estate or just totally change the beneficiaries to the new family you’ve got. This is actually all based on the divorce agreement and what you wish for your former spouse and children.
4. If any of your beneficiaries dies unfortunately, then you must make sure that you revise and make changes to your estate plans so that there’d be a proper distribution of your assets between the remaining beneficiaries.
5. If you wish to change the directives in your living will to whatever you have in your mind, then see your estate planning attorney and discuss on how to go about it.
As you can see above, estate planning is actually an essential part of financial planning and even if any of the aforementioned doesn’t apply to you, still make sure you review your estate plans frequently. Amending the important things in your estate plans would actually give you a great peace of mind and you definitely won’t be bothered about what would happen to that estate in the future.