Estate Planning Basics

In Honor of Financial Wellness Month, Start the New Year Off Right With an Updated Estate Plan:

1. What is Estate Planning?

   Estate planning is the process of creating a strategy for your future. This can include end-of-life care and what happens to your belongings after you pass away. Estate planning can be overwhelming since it heavily revolves around death, but it is essential to protecting your finances and your family. An estate plan can include your will, a document explaining how you want to distribute your assets after passing away. In your will, you can appoint beneficiaries and how much each beneficiary should receive. You should include many other vital documents in your estate plan, such as a trust, power of attorney, and a living will. With an estate plan, you can ensure that your assets are in the right hands once you’re gone. If you’d like to develop an estate plan, contact an experienced estate planning attorney.

2. Why is it Important to Update Your Estate Plan?

   Once you’ve created your estate plan, you might think you’re good to go. While creating your estate plan is an excellent first step to securing your assets, updating your plan periodically is just as important. Why? Well, life is unpredictable. As the years go on, your family’s needs change. These changes should be reflected in your financial planning and your estate plan. For example, if you and your spouse have another child, you might want to add your child as a beneficiary or set up a trust for them. Additionally, you could appoint a guardian for your child in case you pass away before they become an adult. Think of your estate plan as a living document. To best protect your assets, you should update your plan. This way, you can alter your estate plan to suit your family’s current needs.

3. How Often Should You Update Your Estate Plan?

   Now you know it’s best practice to review your estate plan periodically. But how often should you update it? A general guideline is to review your estate plan every three to five years. Of course, some people may revisit their plans more often than others. Some update their estate plans when they review their finances–once or twice a year. Another rule of thumb is to update your estate plan when a life event happens. For example, it’s best to revisit your plan if you get married or divorced.

   A few best practices for updating your estate plan include reviewing your plan when these events occur:

   • You gain a dependent

   • A child or grandchild needs a college fund

   • You or your spouse become disabled or ill

   • You purchase a significant asset like a car or a house

   • You move out of state

   These are just a few ideas. It may be time to review your estate plan if any other major events happen

4. Start the Year off Right — Contact an Estate Planning & Elder Law attorney

   The new year brings fresh starts and change. Start your year off right by participating in Financial Wellness Month by expanding your financial literacy, considering retirement planning, and creating an estate plan if you don’t already have one. Already have an estate plan? Use Financial Wellness Month to revisit it and make some necessary changes. If you need help creating an estate plan or have more questions, contact an Estate Planning & Elder Law attorney in your area.