When people put off updating their estate plans, they’re playing a very dangerous game. This sort of procrastination is downright irresponsible and often results in a people’s loved ones facing additional stress, financial loss, and hurt feelings.

The Wall Street Journal recently highlighted several examples of cases where the originator of a will or trust waited too long to update documents, and the results for surviving family members were costly and emotionally burdensome. It’s a great article and worth the read.

Life Always Brings Change

Your estate documents should be reviewed by an experienced estate planning attorney whenever there are any major life changes that are experienced. Those can include a relocation, a marriage, a divorce, property transfers, starting or selling a business, a decline in health, the death of a spouse, and the addition of new children or other potential heirs.

This can’t emphasized enough: When there is a significant life change, estate documents should be reviewed and likely updated.

Start with the Living Trust and/or Will

A trust and will are living documents and need to be updated regularly – at least every five years. Anytime a major life change is experienced, these documents should be updated as soon as possible to reflect that change.

Also, if a spouse passes away, immediate trust administration and/or will update should be considered. Failure to do so risks putting loved ones through costly and stressful probate proceedings to straighten out the inheritance issues down the line.

Review Retirement Plans

A retirement plan beneficiary designation is one of the most often overlooked parts of anyone’s planning. Unlike other assets, retirement plans are not disbursed by a will or a trust. Instead, they are released based on the beneficiary forms on file with a client’s financial institution.

Too often, people neglect to update these beneficiary designations when their originally identified beneficiary (usually a spouse) dies or they divorce.

Long Term Care

Many people willfully ignore their advancing age and the possibility that one day they may be unable to care for themselves physically. They don’t like to think about paying for medical care.

A single room in a private nursing facility can cost thousands of dollars per month and can quickly wipe out a life savings. If you lack a strategy to protect assets and families from the costs of long term care, you are risking quality of life in the most vulnerable years.

The Unexpected

The WSJ points out another reason to consider updating estate plans –  the possibility of outliving your children.

It’s an unexpected tragedy most people don’t consider when creating their plans. But if the child dies first, what financial or legal consequences might result if the your estate plan was never updated?

An Annual Discussion

As an advisor, it is recommended to hold annual conversations about unexpected life changes and how they affect planning and financial decisions. If we can ever help you with holding those discussions, please contact our office.

Contact Gary in case of any further questions or assistance in updating or setting up your estate plan – By phone @ 847.719.1300 or click here to contact via web form.

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