Most people create an estate plan at some point in life to prepare for what will happen to their assets when they are incapacitated or no longer around to make crucial decisions. However, an estate plan needs to be revised from time to time to reflect the changes in your person’s life and circumstances. Here are three reasons why your need to update your New Jersey estate plan as frequently as is necessary.
- To reflect changes in your objects of affection
When there is a new addition to the family, like a child or a grandchild, it is important that you revise your estate plan to include the new family members. On the other hand, when a family loses a member due to death or divorce, you might want to remove such individuals from your estate plan.
So what happens when you fail to update your estate’s beneficiary information? Well, three consequential things:
- Your assets will go to the last people listed on your beneficiary documents
- Having the wrong beneficiary could mean a lack of protection over your assets
- Errors by your estate plan administrators may go unchecked
- To reflect changes in the law
Changes in federal and state laws can greatly affect your estate plan. A good example is the SECURE Act law requires individuals who own 401 (K)s and IRAs to revise their estate plans to address the effect of the legislation on inherited accounts.
- To reflect changes in your assets and liabilities
A considerable change in your assets and liabilities since your estate plan was first written should be a reason for its review. You want to review how your assets will be inherited and decide if this is still what you want in light of the changes in your estate’s composition.
An estate plan should never be a static set of documents that you store away in a vault never to look at. As changes happen, your estate plan needs to be reviewed as well to accurately reflect your present circumstances.