When California residents create an estate plan, some make a mistake. They think this estate plan can remain untouched until their passing. Unfortunately, that is not the case. An estate plan should accurately reflect your current life circumstances.
In other words, as life changes, so should your estate plan. But do you know when most modifications happen? Today we will look into this.
Life changes result in estate plan modifications
Forbes looks into some of the most common reasons for estate plan modifications. Many of them have to do with major changes in a person’s life. As mentioned above, estate plans should reflect your current life circumstances. An estate plan determines who will get your assets. It also relies on an accurate report of what assets you have to give. This means many people update their estate plans if they face changes to family or finance.
For family changes, this includes any loss or addition to a family. Loss may be through divorce or death. For example, a family member may die before you. You may divorce a spouse. In these cases, you want to remove the individual from your plan. In other cases, you may want to add someone. This can include new spouses or children.
Financial fluctuations in your life
As for finances, you should report major changes. Fluctuations happen to everyone. No one has finances that remain the same all throughout their life. It is the major changes you should report. This includes falling into debt and filing bankruptcy for losses. For gains, it may include coming into an inheritance or winning a cash prize.
Keeping your estate plan updated ensures your loved ones have less hassle after you pass. They know that your plan is up to date, and they do not have to dig for accurate information.