If you’re like many people, maybe you’ve been meaning to review your estate plan but keep procrastinating. You’re not alone! Reviewing your estate plan can be confusing, and sometimes it feels easier to leave it for another day. However, consistently updating your estate plan ensures that your desires are met – especially considering all the changes that life brings. Forbes states that “there are two widespread errors in estate planning. One error is not to have a will or other key elements of a plan. The other error is to fail to update the will and estate plan.”
Why Review Your Estate?
One of the most common (and important!) reasons to review your estate plan is to make updates regarding your beneficiaries. Beneficiaries – usually your children – change as they grow, and it might be time for your estate plan to adapt to those changes.
For parents with young children, a key decision in estate planning is appointing guardians. But even once guardians are no longer essential, you’ll want to keep considering questions such as:
- Is your child married?
- Is your child financially responsible?
- Are you leaving assets to your children in a trust?
- Does your child have children?
Many trusts distribute assets as children reach certain ages. A common plan might be to distribute one-third of assets once your child is age 25, then one-half of the remaining assets when they turn 30, and so on. However, if your child has now reached these milestones, they will receive distribution of part or all of the trust assets outright and free of trust once you (and your spouse, if you are married) pass away.
Besides perhaps not wanting to have your beneficiaries receive such a large lump sum at once, you may change your feelings about your children receiving the same amount of assets you originally intended.
Common Reasons to Adjust the What, When, and How of Your Children Receiving Assets
- You might feel differently about your child’s ability to handle a large inheritance.
- You might have good reason to believe that large sums (especially if received as a lump sum all at once) might be used imprudently.
- Your child might be married now, meaning that an inheritance could be easily commingled with the spouse’s assets. As Fidelity points out, this means that if your child gets a divorce, the assets from your estate might be distributed equally between your child and their ex-spouse.
- One of your children has been financially successful while another has not.
- You might have initially desired that your assets be equally divided among your children but this desire might have changed over time depending on a variety of circumstances.
Even if you still want your child to receive the same amount of assets that you originally intended, you might wish for the way that they receive the assets to be different. You can write restrictions into your estate plan that determine how and when your child can use the assets you give to them.
Other Reasons You Should Review Your Estate Plan Once the Kids are Older
While the above situations are common, it’s also very possible that you do not wish anything to change regarding your beneficiaries, how much of your assets they receive, and when and how they receive the assets. However, as your children grow up, you still need to continually review your estate plan for a number of reasons.
- In some cases, beneficiaries named on retirement accounts and life insurance policies may not be in line with the trusts created for children under a will or revocable trust.
- According to Fidelity, minors do not typically need health care powers of attorney, living wills, or advance health care directives, since their parents or guardians are legally responsible for them. But once children become adults, it’s wise to consider them having these important documents in their own right.
It is vital to revisit all the ways assets are being left to your children, taking into account their current ages, maturity levels, and your own wishes.
Do you want help making sure that your estate plan is completely in line with your current desires? It might be time to talk to an experienced legal team. We truly care about making your estate plan clear and simple – for you and your beneficiaries. We understand that what you want concerning your estate can change over time, and we’re dedicated to making the legal implications of your estate consistent with those changes. If it’s time to update your estate plan with confidence, call our St. Petersburg office at (727) 565-4250 or our Tampa office at (813) 200-4485 or contact us online.
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