Estate planning is often not a one-and-done task, especially for parents with minor children.
For younger parents, life can change dramatically in just a few years. You may welcome another child, your children may grow from toddlers into teenagers, you may buy a new home, change jobs, get married or divorced, or your family’s financial circumstances may change. Each of these events can affect the estate plan you created years earlier.
Unfortunately, many people intend to update their Wills and Trusts but never quite get around to it. Others assume that once they have signed their estate planning documents, they never need to look at them again. That can create problems when an outdated plan no longer reflects your family’s circumstances or wishes.
At McManus Estate Planning, LLC, we help families throughout Cape Cod, Plymouth, Hyannis and Southeastern Massachusetts review and update their estate plans as life changes. While every family is different, here are 12 times during life when parents should consider reviewing their Will, Trust and other estate planning documents.
1. You Welcome a New Child
Few events change your life more than welcoming a child into your family. If you have another baby after creating your estate plan, review your documents to make sure the new child is appropriately included. Parents should also revisit their choices for guardians and trustees.
If something happened to both parents, who would raise the children? Who would manage money for them? These are important questions for every parent with minor children.
A properly drafted estate plan can provide instructions for the care and financial support of your children and can be structured to accommodate future additions to the family.
2. You Get Married or Remarried
Marriage is another important reason to review your estate plan. If you created a Will or Trust before getting married, it may not reflect your current wishes. You may now have a spouse whose financial future you want to protect, children from a previous relationship or new children together.
A remarriage can be particularly important because blended families may have more complicated estate planning needs.
Reviewing your plan after marriage can help ensure that your documents, beneficiary designations and other arrangements work together with your current family structure.
3. You Are Considering Divorce
Divorce can have significant implications for your estate plan. If you are considering separation or divorce, do not assume your existing Will, Trust and beneficiary designations will automatically change in the way you expect.
Estate planning and divorce laws can interact in complicated ways, and legal restrictions may apply during divorce proceedings. Before making changes, talk with your estate planning attorney and your divorce attorney about your specific circumstances.
4. Your Divorce Is Finalized
Once a divorce is finalized, your estate plan deserves another careful review. Parents may need to reconsider guardians, trustees, beneficiaries, powers of attorney and other important decisions.
Don’t forget about beneficiary designations on life insurance policies, retirement accounts and financial accounts. Updating a Will or Trust may not automatically change every beneficiary designation.
5. Your Children Grow Up
When your children are young, you may choose a parent, sibling or close friend as their guardian or trustee. As your children grow into adulthood, you may decide that an adult child is capable of taking on certain responsibilities. You may also decide that another family member or professional would be a better choice.
6. One of Your Beneficiaries Has a Major Life Challenge
Sometimes a beneficiary’s circumstances change significantly. Perhaps a child is struggling with financial difficulties, substance abuse, a disability, creditor problems or another situation that makes receiving an inheritance outright a concern.
Depending on the circumstances, a trust may allow a trustee to manage assets for the beneficiary rather than giving the beneficiary immediate and unrestricted control. Because every situation is different, parents should discuss these concerns with an estate planning attorney before making changes.
7. A Beneficiary, Executor or Trustee Dies
If someone named in your estate plan dies, it is important to review your documents. Your Will or Trust may already identify a successor, but that does not necessarily mean the existing arrangement is still the best choice.
For example, if your original trustee has died, moved away or become unable to serve, you may want to select someone else. The same is true if a beneficiary named in your estate plan dies.
Reviewing the plan ensures that the people responsible for carrying out your wishes are still the people you trust to do so.
8. You Experience a Major Financial Change
Estate planning should reflect your financial circumstances. If you purchase a home, sell a business, receive a significant inheritance, receive a substantial settlement or otherwise experience a major change in wealth, it may be time to revisit your estate plan.
A substantial financial change can affect your tax planning, asset protection strategies and the way you want assets distributed.
9. You Buy Property in Another State
Moving to another state, or just purchasing real estate in another state, can create new estate planning considerations.
For example, a family living in Massachusetts might eventually purchase a vacation home in another state. Depending on how the property is owned and how your estate plan is structured, the property may create additional administrative or probate considerations which should be reviewed with an estate planning attorney.
10. Estate Planning Laws Change
Estate planning laws and tax rules can change over time. Federal and Massachusetts laws may affect estate taxes, retirement accounts, trusts, beneficiary designations and other aspects of your estate plan.
You do not necessarily need to rewrite your documents every time the law changes. However, it can be worthwhile to periodically have your plan reviewed to determine whether changes in the law affect your particular situation.
11. You Cannot Find Your Estate Planning Documents
It may sound simple, but knowing where your estate planning documents are located is important. If you cannot find your original Will, Trust or other estate planning documents, you should address the problem rather than assuming they will turn up eventually.
Your family needs to know where important documents can be found and who should have access to them when necessary. If documents are missing, an attorney can help determine what steps may be appropriate based on your circumstances.
12. You Simply Haven’t Reviewed Your Estate Plan in Years
Perhaps the most important reason to review your estate plan is also the easiest to overlook: time has passed. Even if nothing dramatic has happened, your family may look very different from the family you had when you originally created your estate plan.
A periodic review gives you an opportunity to ask a simple question: Does this plan still reflect what I want for my family? If the answer is no—or if you are simply unsure—it is worth having your documents reviewed.
Why Parents Should Keep Their Estate Plans Current
For parents, especially of minors, estate planning is ultimately about protecting the people you love. A Will can be an important part of that plan, but many families may benefit from a broader estate planning strategy involving one or more Trusts. A properly structured Trust can provide instructions for managing and distributing assets while potentially helping families address concerns involving minor children, incapacity, taxes and asset protection.
The right approach depends on your family’s circumstances. Most importantly, your estate plan should not remain frozen in time while your family continues to change.
Wills and Trusts for Families in Southeastern Massachusetts
Life rarely follows the exact path we expect. That is especially true when you are raising children. The family you have today may look very different five, ten or twenty years from now.
Your estate plan should change with you.
McManus Estate Planning, LLC has locations in Plymouth and Hyannis, MA, serving families throughout Cape Cod and Southeastern Massachusetts. We help our clients create and maintain estate plans designed around their current circumstances and long-term goals.
If you have not looked at your Will, Trust or other estate planning documents in several years or if you have recently experienced one of these major life changes, it may be time to schedule a review.
Estate planning is not about expecting something bad to happen. It is about being prepared, protecting your family and having the confidence that the plan you created still reflects the people and priorities that matter most to you. To schedule an initial free consultation to discuss reviewing your estate plan, contact McManus Estate Planning, LLC, to book your appointment with Attorney Keith McManus.