A Guide to Updating Your Estate Plan After Major Life Changes

Life is full of unexpected twists and turns. From joyous occasions like marriage and the birth of a child to other significant changes like divorce or the purchase of a new home, these events shape our future in profound ways. However, they also necessitate a crucial task that many overlook: updating your estate plan. Let’s discuss why keeping your estate plan current is so important and walk you through the steps to ensure your financial legacy remains intact.

Hi, I’m Amanda Waltz, a dedicated estate planning attorney with years of experience helping clients navigate the complexities of estate law. My mission is to provide personalized legal advice that aligns with your unique needs and goals. Driven by honesty, integrity, and respect, I’m passionate about empowering my clients with the knowledge and tools necessary to make informed decisions about their estate plans. I believe in making the estate planning process seamless and straightforward, so you can focus on what truly matters—your loved ones and your legacy.

Why Updating Your Estate Plan is Important

1. Reflecting New Relationships
   
   • Marriage: Adding your spouse to your estate plan is vital to ensure they are legally entitled to inherit your assets and make decisions on your behalf.
     
     If you don’t update your estate plan after getting married, your spouse may not be legally entitled to inherit your assets. This can lead to legal disputes and your spouse may not have the authority to make important medical or financial decisions on your behalf.
     
   • Divorce: Removing an ex-spouse from your estate plan prevents potential legal disputes and ensures your assets are distributed according to your current wishes.
     
     If you fail to remove an ex-spouse from your estate plan, they may still be entitled to inherit your assets or make decisions on your behalf. This can also create conflict among your family or beneficiaries who are navigating the probate process after your passing.
     
     
2. Welcoming New Family Members
   
   • Birth or Adoption of a Child: Ensure your new child is included in your will and other estate planning documents. Consider setting up a trust to provide for their future.
     
     If new children are not included in your estate plan, they might not receive any inheritance or financial support. Additionally, without updated guardianship designations, the court may appoint a guardian who does not align with your preferences.
     
     
   • Changes in Guardianship: If you have young children, updating your choice of guardians in case of your untimely passing is essential.
     
     Failing to update guardianship designations can result in your children being cared for by someone you would not have chosen. This can cause emotional distress for your children and legal complications for your family.
     
     This is one of the most important reasons parents of young children need an updated estate plan in place.
     
     
3. Changes in Financial Circumstances
   
   • Significant Asset Acquisition: Purchasing a new home, acquiring a business, or other major investments should be reflected in your estate plan to manage how these assets are distributed.
     
     If new assets are not reflected in your estate plan, they may not be distributed according to your wishes. This can lead to unintended beneficiaries receiving those assets, or the assets being subject to probate, resulting in delays and additional costs. Learn more about how to avoid probate here.
     
     
   • Debt and Liabilities: Changes in your financial obligations should also be addressed to ensure your estate can cover any outstanding debts.
     
     If changes in your financial obligations are not addressed, your estate might not have sufficient funds to cover outstanding debts. This can reduce the inheritance for your beneficiaries and potentially leave them with financial burdens.

If you don’t account for Medicaid estate recovery laws in your plan, your beneficiaries might have to give up a significant portion of their inheritance to cover Medicaid costs. This can undermine the financial security you intended to provide for your loved ones.

Steps to Update Your Estate Plan

1. Review Your Current Documents
   
   • Start by finding your current estate planning documents – do you know where they are?
     
   • Then, thoroughly review your existing documents, including your will, trusts, power of attorney, and healthcare directives.
     
2. Identify Necessary Changes
   
   • List the major life events and changes in your financial situation that need to be reflected in your estate plan.
     

Here are some examples: 

Marriage or Divorce:

• Update beneficiary designations in your will, retirement accounts, and life insurance policies to include or remove your spouse.
• Revise your power of attorney and healthcare directives to reflect your current wishes regarding who can make decisions on your behalf.
• Consider creating or dissolving trusts that benefit your spouse.

Welcoming New Family Members:

• Add new children as beneficiaries in your will and any trusts.
• Update guardianship designations for minor children to ensure they are cared for by your chosen individuals.
• Consider setting up education funds or other financial provisions for your children’s future.

Significant Financial Changes:

• Include new assets such as property, businesses, or substantial investments in your will or trusts.
• Adjust the allocation of assets to reflect any significant increase or decrease in your estate’s value.
• Ensure debts and liabilities are accounted for and provisions are made to address them.
  
  

3. Consult with an Estate Planning Attorney
   
   • Schedule a consultation with a qualified estate planning attorney in your area to discuss the necessary updates and ensure all legal requirements are met.
     
     I am a licensed attorney in Ohio and serve the Northwest, Ohio area. I offer a free consultation call to learn of your specific needs and whether I can assist in your estate planning journey.
     
     
4. Execute Updated Documents
   
   • Sign and notarize the updated documents as required. Ensure copies are stored securely and shared with relevant parties, such as your executor or trustee.
     
     Learn more about who keeps the original copy of a will in this blog post.
     
     
5. Regular Reviews
   
   • Set a reminder to review your estate plan regularly, even if no major life events occur. I recommend reviewing your estate plan about every 3-5 years. This practice ensures your plan remains aligned with your wishes and current laws.
     
     

Updating your estate plan is a vital part of protecting your legacy and ensuring your wishes are honored. By revisiting your plan after significant life changes, you can provide peace of mind for yourself and your loved ones. If it’s been a while since you reviewed your estate plan, now is the perfect time to do so. 

Just getting started with your estate planning? Read more about the estate planning process here. 

Ready to update your estate plan? Contact me to schedule your consultation. Let’s make sure your legacy is secure and your wishes are honored.