It is wise to update your estate plan periodically. Life changes. You may sell or acquire new assets. You could get married or divorced. You need to update your estate plan to reflect these types of changes as you focus on the future.
At the same time, it is important to consider potential changes for beneficiaries. These could also necessitate an update of your estate planning documentation.
When a beneficiary passes away
One example of this is if someone passes away before you do. You have already named them as a beneficiary who should receive assets, but you need to change the estate plan to allot those assets to someone else. This gives clear instructions to your estate administrator for how you want things to be handled.
When a beneficiary has health complications
But even if the person does not pass away, it could still change how you want to address their inheritance.
For instance, someone who has a disability may qualify for government benefits, but they may have to pass a means test. If you leave them an inheritance directly, as you originally planned, they may no longer qualify for the benefits that they need. They would be forced to spend the inheritance down first.
One potential way to address this, though, is to change their inheritance so that it goes into a special needs trust. This means that they do not own it, and they can still pass the means test and retain their benefits. All it takes is a change to your estate plan.
Making necessary updates
Do not assume that your estate plan will work indefinitely, just the way you originally wrote it. Take the time to make periodic updates and be sure you understand what legal steps are necessary.
