5 Events That May Upend An Estate Plan
Estate planning is fundamentally about anticipating possibilities and eventualities. However, events can blindside even the best planning efforts. If your current plan doesn't account for these 5 events, you will want to talk with a lawyer as soon as possible after they happen.
Change in Marital Status
Marriage or divorce can significantly alter the structure of an estate. Foremost, a surviving spouse has one of the strongest claims in estate law. Someone who recently married may not have a plan that accounts for how much their spouse can claim. Consequently, other beneficiaries may end up short if the estate plan hasn't adjusted to the marital situation.
Similarly, folks who are divorced may not feel particularly charitable toward their exes. You will likely want to review any references to your former partner to ensure everything conforms to your wishes.
An Unavailable Executor
Some events could occur even after an estate goes into effect. For example, what happens if an executor falls ill, dies, or is too busy? Ideally, your estate plan will name a successor so a new person can take over the role. Otherwise, a court will have to appoint an administrator.
Especially if you change your residence to a different state, some of your estate planning work may be for naught. You should speak with an attorney from your new state so you can learn its rules. They should also review your plan and see if there are any clauses inconsistent with the state's laws. You can then adjust the plan accordingly.
Major Financial Windfalls or Losses
Much of estate law focuses on the disposition of assets. However, major changes in your assets could adversely affect your estate. Suppose you win the lottery or see an investment pay off faster and bigger than expected and you ultimately leave behind more money than you planned for. While an executor will have the power to interpret your wishes for the proceeds, their life will be easier if you state what they should do with the funds.
Thousands of new federal and state laws appear every year, and some are bound to affect estates. While there's a good chance no one law in any given year will influence your estate, there is always a risk. You should review your estate every couple of years anyhow so ask for a review sooner if you think a law might influence your estate for the worse or better.
Reach out to an estate planning attorney for more information.