There are two common misconceptions about estate planning. One: People often believe they don’t need an estate plan. As a result, many people die intestate, which means the state has to administer an estate on behalf of the testator. This can cause a lot of issues for beneficiaries who were under the impression that they would inherit from the deceased’s assets.
Two: People who do have estate plans often don’t realize that they should review and revise their plans. It’s often best for people to update their estate plans every two to three years. When people update their estate plans regularly like this, then their plans can account for any new assets.
However, some events may cause people to update their estate plans early, including:
Marriage or divorce
Marriage is a big event in people’s lives. Many people make sure to include their spouse in their estate plans. Their spouses may be in line to inherit a large portion of the estate so that they can live comfortably. Or, testators may name their spouses as powers of attorney to act on the testator’s behalf if they were suddenly incapacitated. Many people want to reverse these changes in their estate plans after divorce.
The birth of a child
An estate plan may also be altered after people have children to include the designation of a guardian for that child. A child’s guardian would step in if both parents were suddenly incapacitated or killed, such as in a car accident. Naming a guardian helps make certain that a child is raised in a loving home, no matter what.
Business succession planning
Many people start businesses. People can update their estate plans to include business succession plans. These plans can decide what happens to a business, such as naming someone to inherit the business or splitting the ownership of a business between their adult children.
There are a lot of reasons to update an estate plan. It often helps testators to work with people who have a strong understanding of the law when making changes to their estate plans.