Taking the time to sit down and draft an estate plan is an important and major step to take. However, what some individuals fail to do is to continually update their estate plan. While having a will and other documents in place is better than not having any at all, the reality is that there are many life events that could greatly impact these documents. In fact, failing to update an estate plan could result in unintended consequences, such as the wrong beneficiary receiving an asset or heirs getting a portion of your estate that you did not intend to receive any.
No matter when an individual begins the estate planning process or what reason they have to update it, there are six documents that are considered essential in an estate plan. The first is the most obvious, which is a will. This document names an executor, which is the person that will administer the distribution of your assets, it details who gets which assets and it also appoints a guardian of you minor children, if you have any, if you pass before they reach the age of majority.
Second, is a living or revocable trust, which can help provide the management of you assets for your benefits while you are alive while also naming the person the will receive the property in the trust at the time of your death. Nest is a personal property memorandum. This document allows one to gift tangible personable property not covered in the will. This often includes jewelry, artwork, furniture and other similar items. The fourth document is a durable power of attorney, which is used to appoint a person to act on your behalf for financial and legal matters.
A healthcare proxy or power of attorney is the fifth essential document. This document appoints a trusted individual to make medical decisions for you if you are unable to. It also authorizes them to have access to your medical records. The final document is a living will. This document expresses one’s end-of-life wishes. Because these six documents are each important on their own, it is important to not only have them within an estate plan but to update them as well.
No one can plan and prepare for every possible future event; thus, individuals should treat the estate planning process as an ongoing or continual process. When event such as marriage, divorce, the birth of a child or the diagnosis of an illness occurs, it is vital that one revisits his or her estate plan. It can be challenging to navigate these matters or even to understand what measures must be taken to protect yourself and your estate. Thus, it may be beneficial to explore your options with a legal professional.