A new child or grandchild in the family means it’s time to update your estate plan! Any time you reach a major milestone in your life, it’s a good time to revisit your estate plan and make some updates to reflect those life changes. Never is that truer than when you add a new member to your family, whether it’s in the form of a new marriage or a new child or grandchild.
If you had an estate plan in place before you got married, you had probably intended to leave most of your assets to parents or siblings if you passed away. But with a new family member comes new priorities and the need to revisit your estate plan to ensure everything is in order.
How does a new family member affect my estate planning?
A new spouse, new child or grandchild will have a significant impact on your estate plan, affecting such things as your wills and trusts, your business succession plans, your beneficiaries on retirement and insurance policies and the general approach you use when creating advance directives.
Therefore, after you get married or if your family grows with the addition of a new child or grandchild, it’s important to take some time to talk with an estate planning attorney about the steps you need to take to ensure your estate plan reflects the changes that have recently occurred in your life. The addition of a child to the family would necessitate a change in your distribution scheme to your loved ones in the event of your passing.
In addition to big changes to your family dynamics, there many other reasons to reach out to your estate planning attorney. Here are some other common reasons why you should review your estate plan with your attorney as soon as possible.
- Evolving Family Dynamics. A change in your family dynamics is one of the biggest reasons to review your estate plan. There is no doubt that you want to make sure your family and loved ones are correctly cared for in the future. If you have married since establishing your estate plan, you will need to review your estate to ensure your spouse will share in your estate. And if you are now divorced, then it’s safe to assume you wouldn’t want your ex-spouse to receive a portion of your estate.
- Changes in Your Finances. A change in your finances may usually correlate with a change in your assets, and this may require you to ensure that your distribution schemes are in line with your finances. For example, if you have acquired new assets since establishing your will or trust (including real estate or interest in a business), then it is essential to contact your estate planning attorney to be sure that your new assets are covered and/or properly distributed in your will or trust. And if your assets have grown significantly, it is a good idea to explore tax planning with your attorney as well to avoid high estate taxes in the event of your passing.
- Your Health. Life is unpredictable. People age, accidents happen. Your health can be affected in many ways because of these factors. Experiencing a change in health or having an unexpected medical condition may cause you to reassess your wishes in your will or trust. It may be time to consider amending your healthcare agent so that someone you trust can make medical decisions for you should you lose decision-making capacity.
- Insurance Policy Changes. Over time, you may find that you want to change the terms, coverage options, or beneficiaries on your insurance policy. When this happens, it is recommended to have your estate planning attorney review and draft the proper documents to ensure everything is coordinated and correct in your estate planning documents. It is important to note that your insurance policy’s beneficiary designation will trump what your will or trust designates.
If you or a loved one needs help setting up or reviewing a living trust, our estate planning attorneys are ready to help protect your family. Call Morneau Law today at (603) 943-5647 for a consultation.