Whether thinking ahead about where to attend college, what career path to pursue or retirement, planning for the future can be quite the task. This is especially true when it comes to planning for after one’s death. However, estate planning is not something that you can do once and then forget about.
It is still important to regularly revisit your estate plan even if you feel uncomfortable thinking about what will happen after your life is over. This is because major — and even minor — life changes can impact the effectiveness of your plan. Here are a few things to keep in mind if you are unsure whether it is time to review your own estate plan.
Have there been big changes?
Although the old adage that the only constant in life is change might be a bit of a cliche, it holds some truth. Your life probably looks much different than it did just five or 10 years ago. Consider the following life changes that virtually always necessitate a change in your estate plan:
- Moving to a new state
- Getting married
- Getting divorced
- Having a child
Updating your estate plan after moving to a new state is particularly important. Estate planning laws vary from state to state, so if you recently moved to Colorado, your old plan might not function as intended. After a big move, you should also be sure to update your address and inform loved ones where your important documents are.
What documents should you review?
Your first stop in this journey will most likely be with your will. If you recently welcomed a child into your family, you may start by including a guardian designation. Or if you are newly divorced, it might be time to remove your ex-spouse from your will. Of course, there are several other documents that you might have in your estate plan, including:
- A living will
- Powers of attorney
- Trusts
Updating powers of attorney is an essential step after a big life change. Financial and medical powers of attorney give individuals the right to make important decisions on your behalf if incapacitated or otherwise unable to do so. If the person you named in your power of attorney now lives in a different state or is no longer a close or trusted friend, select a new individual and be sure to update these documents in a timely manner.
What if nothing has changed?
So, what do you do if a year or so has passed without any major life changes? Perhaps you are still at the same job, in the same home, and married to the same spouse with the same number of children. Believe it or not, you still need to set aside time to review your estate plan. Checking in annually can help you spot possible areas that need further attention, potentially avoiding difficult situations.
Estate planning can feel overwhelming, especially to those who are unfamiliar with Colorado state law. That does not mean that it has to be an impossible task, though. Those who are unsure of how to update or review their estate plan often find that having the right guidance on their side can be invaluable.