You’ve no doubt heard people refer to the process of signing a last will and testament or other legal documents regarding such issues as “getting your affairs in order.” Some people in Illinois, or elsewhere, do this early in life, in their 20s or 30s. Others prefer not to think about an estate plan because doing so means, in essence, that they are thinking about their own mortality.
The exact time that you decide to execute your estate plan isn’t as important as keeping your plan updated, once you compile a portfolio. When you initiate your plan, the last thing you want to do is to treat it as a one-time process. Instead, it’s important to periodically review your plan to check whether any changes or updates are necessary. Failing to do this can have negative repercussions when the time comes to administer your estate.
When should you look over your estate plan?
Those who are well-versed in legal matters of estate typically share a general consensus that it’s best to review your estate plan every three to five years. However, if you experience a major life-changing event, such as a marriage or birth in the family, you might want to review your plan sooner.
For instance, if you name your spouse as a sole beneficiary, then file for divorce two years later, you’ll want to make sure you review and update your estate plan, as needed, even though three to five years have not passed since you first executed the plan.
Life events that often prompt estate planning updates
In addition to marriage, divorce or a birth in the family, the following list shows other issues that might compel you to update your existing estate plan:
- Adopting a child
- Child guardian designee becomes incapacitated or deceased
- Purchasing or selling a large asset
- Receiving an inheritance
- Launching or closing a business
Any event that occurs that is relevant to the value of your assets or amount of liability you have at a particular time is reason enough to carefully review your estate plan to check whether the circumstances merit an update.
Problems may arise if you fail to update your plan
If you execute an estate plan in Illinois, in accordance with state laws that govern such matters, the instructions and decisions you have shown in your plan are legally enforceable. Failing to update a plan at the proper time can cause legal problems for your loved ones down the line.
Perhaps you tell a grandchild that he or she is going to inherit your home when you die. If you forget to update your estate plan to reflect this inheritance, and especially if you had already designated another person to inherit your home, legal complications may arise when two people come forward to tell the court that they believe they are rightful beneficiaries.
Thorough planning, reviews and updates will keep things in order
While your estate plan is legally enforceable, it is not necessarily set in stone. Especially if you executed your initial plan at a younger age, many life events may occur that compel you to make deletions or other changes in your existing plan. Setting aside time for periodic reviews of your plan, and remembering to check the plan if a major life event occurs, can help you protect your assets and pave the way for a smooth probate process for your loved ones.