If you have an estate plan, you are already doing better than many. Creating an initial estate plan is certainly challenging, and it’s often an emotionally difficult process. It’s understandable that you don’t want to repeat the experience and update your plan. But as your Illinois estate planning law firm, we feel it’s important to let you know that updating your estate plan is crucial.
You don’t have to update your estate plan every month or even every year – but you do need to update it when necessary. That typically means making changes when your life changes. When you experience certain life events, your family’s needs change and your estate plan needs to change, too.
Let’s look at some of the reasons to update your estate planning.
Life, Law, and Learning – Core Reasons to Update Your Estate Plan
We have discussed this topic before, and we presented three main areas where change can and should impact your estate plan. These were:
- Life. When life changes, the estate plan has to change to be as helpful as possible. Changes in family, health, job status, and finances can all lead to the need to update the estate plan. If you gain or lose family members, experience changes in your health, or go through serious financial changes – like losing or gaining a lot of money – it’s time to update the estate plan.
- Law. Illinois and federal law can change over the years. Changes can happen to tax laws, inheritance laws, and other relevant laws that require reformulating your estate plan to ensure maximum protection for your assets.
- Learning. Over the years, you can discover things about yourself or your loved ones that make you want to change your plan. For example, maybe you discover one of your beneficiaries struggles with money and want to change the trust you created to better help them. As you learn, you can use your knowledge to make a better estate plan.
Specific Reasons to Update Your Estate Plan
We think the three Ls give a good framework for when to update your estate plan. However, it might be helpful to go a little deeper into the reasons why you would want to make changes now and in the future.
1. Divorce
Divorce changes everything, and for most people, it should lead to a change in the estate plan, too. There are likely multiple documents that need to be updated beyond your will or trust, as well. Retirement plans, powers of attorney, and other documents usually have the spouse listed as the beneficiary and those instructions will remain in place until you update them.
It is important to note that any changes you make to your estate plan must adhere to the terms of your divorce. We can go over those terms with you and ensure that your new estate plan honors them.
2. Marriage
During happy transitions such as a new marriage, it can be easier to overlook things like estate plans and beneficiary designations. Even in such happy times, though, it’s a good idea to look to the future and ensure that your wishes are outlined clearly as far as your estate goes.
The state generally assumes that you will leave half of your assets to your current spouse unless you leave other instructions. If you have other wishes, it’s necessary to make them known in your estate plan to avoid complications. We can help you determine how to protect your new spouse while also honoring any other wishes you have for your estate.
3. Birth of a child
Many people want to leave their children a significant portion of their estate and give instructions in their estate plan to do so. But if you have a new child, the way you structure that plan will likely change. And since the child is so young, it might be necessary to designate someone to manage their portion of the estate until they come of age.
4. Death of a spouse
Usually, married couples choose to leave the majority of their estate to their surviving spouse. But if your spouse passes away, it’s necessary to significantly update your estate plan to account for the changes you are experiencing. You might want to create a plan that ensures your children now inherit the estate. You will also need to change other documents such as powers of attorney.
5. Change in financial situation
We design estate plans based on the specifics of your financial situation at the time. If that financial situation changes significantly, for better or for worse, it’s recommended to go back over the estate plan and adjust it accordingly.
6. Anticipated illness
Long-term illness can take a heavy toll on your estate. There are some tools we can use to help protect that estate, though. It just requires careful analysis and planning. The sooner we know that changes need to be made, the more effective we can make the plan in protecting your assets.
7. Purchased a home
Homes are usually some of our biggest assets. If you purchase a new home, we recommend updating your estate plan to protect the new asset.
8. Moved to another state
State laws can be quite specific about how estates are treated. You might need to update your executor, adjust to new marital property rules, and more. The best estate plans are crafted based on the exact laws of the state you know live in.
We Are Here to Help With Your Estate Planning in Illinois
Estate planning can be hard for so many reasons. We understand this fact better than most. But we want you to know that you are not alone in this process. Our Illinois estate planning lawyers offer compassionate, knowledgeable assistance with all types of estate plans. We work with you to protect what matters most.
If you have experienced any of the changes mentioned above, or have questions about anything we talked about above, please get in touch or attend one of our free workshops. At our workshops, you can meet an attorney and others going through similar situations. It’s free, easy, and very helpful!
Or, if you know you’re ready to work with us to create or update an effective estate plan, you can schedule an initial meeting with one of our estate planning lawyers. Whatever your preference, we are ready to help you update your estate plan and guide you through the process to make sure all of your goals and unique circumstances are met and planned for.