What Life Milestones Should Trigger a Review of Your Estate Plan?
Adapting to changing circumstances is important at any time of your life. When managing your estate, you should always be mindful that certain events could impact decisions you may have made in the past.
From the time you begin to accumulate assets, you should start considering how your passing could affect others and how you wish your property to be distributed. Estate planning becomes especially important when you have a spouse, children, and perhaps grandchildren to consider.
Your estate plan or will that you created at age 25 is likely not properly addressing your situation in life at ages 40 or 65. Without a clear estate plan that defines your intentions, many who die unexpectedly leave families in chaos and confusion with unexpected and expensive consequences.
What events or milestones should trigger an automatic review of your estate plan?
Important Milestones of Life
There is no possibility that, at age 25, you can anticipate what your situation will be ten, twenty, and thirty or more years later. Even if you have clearly defined goals, the joys and uncertainties of life are unpredictable and a periodic review of your estate plan with an experienced estate lawyer is important.
Milestones that can impact your estate planning are:
Prior to setting the date, couples should discuss how their finances are to be managed. In instances where both partners bring assets to the union or both are employed, the couple may agree to pool everything into joint accounts. The will or estate plan can define that the surviving spouse will inherit everything.
Or, partners may choose to develop a system of separate finances, sometimes with a prenuptial agreement. This document can define what happens to certain assets if a spouse should pass away or if the couple divorces.
2. Raising a Family
At some point, most couples decide to have a child. With that decision, you automatically accept the burden of responsibility for caring for that child until they become adults. At this point, your estate plan should be modified to deal with the possibility of you and/or your partner passing away. The estate plan should address:
- How will the assets be distributed? Will these be distributed all at once to cover the cost of caring for the minor(s) or allotted in increments over time.
- Will a portion be reserved for college tuition or another specific event?
- Who will become the legal guardian in case of the death of both parents?
If more children come, you will need to make further adjustments to your estate plan to address the same issues for each new arrival.
Divorce, unfortunately, is a fact of life. Today, 40-50% of marriages end in divorce. When this happens, you should review your will or estate plan to address the changing circumstances. A prenuptial agreement may have addressed this possibility, although in many cases a divorce judgment may determine the division of assets.
If children are involved, you may elect to refocus your estate plan differently to accommodate them specifically when you die.
Don’t forget that if you should remarry, you will need to visit your estate lawyer once more.
Later, after the children have grown and your life’s journey settles into a less active routine, you will want to revisit your estate plan.
At this stage, you may be considering such issues as assisted living options and living wills for yourself and your partner.
Note that retirement funds like Traditional and Roth IRAs required specified beneficiaries that you should review and amend as needed. Review your life insurance policies to ensure the beneficiary list is current.
It is possible that you may be considering including grandchildren or some philanthropical elements in the estate planning.
Work with a Trusted Estate Attorney
As your life changes, so do your estate planning needs. In each situation, you should work with a proven and experienced Estate Lawyer who will formalize your wishes at any stage of life.
In New Jersey, the Law Offices of Nicholas A. Giuditta, Estate Lawyer and Planner, offer personal and focused estate planning for all the stages of your life. Contact Giuditta Law in Westfield at 908.232.0099 for an appointment.
Do not procrastinate. Don’t forget that you can control the outcome only while you are living, not after.