If you have already written a will, you might think that you have done all the estate planning you need to do. However, creating an estate plan and letting it gather dust for 10, 20 or 30 years is one of the biggest mistakes people make with their end-of-life decisions. Whether you have a will, living trust or a health care directive, you need to periodically review these documents to make sure they still reflect your wishes.
Most estate planners recommend that people review and update their documents every five years. In addition, there are some life events that should trigger you to take action and make any necessary changes to your estate plan.
Upswing in your financial situation
Whenever it looks like you are about to benefit from an investment, your business in Denver is finally taking off or you have received a substantial inheritance, you should consider making some changes to your estate plan. This is especially true if you want to protect some of these assets for your heirs or beneficiaries.
Downturn in your financial situation
On the other hand, if you suddenly find yourself with assets that have declined in value, it might be time to take advantage of possible reduced taxes and interest rates involved in making a lifetime transfer. This could be a time to explore various options for creating a trust to protect your assets for your family.
Changes in your relationship status
Two other times you should review and update your estate plan is when you marry or divorce. While some states do have recourse laws on the books in case you forget to update your will, you should still take the time to update the documents to ensure that your beneficiaries receive their fair shares of your property.
Becoming a parent or grandparent
When a new child comes into the family, it's the perfect time to update your will and other estate-planning documents. If you are a new parent, you can safeguard your child's future by naming a guardian and setting up a trust in case something happens to you. If you are a new grandparent, you can also set up a trust for your grandchild so that he or she has a more financially secure future in the unfortunate event that something happens to the parents or to you.
If you have not begun the estate planning process, there is no time like the present. With the right estate plan, you can protect the family fortune for the next generation.