Estate planning is not a one-time event but an ongoing process that requires regular review and updates. Life is full of changes, and your estate plan should reflect your current circumstances, goals, and wishes. As a result, your loved ones and assets remain protected in the way you intend. Here are some important reasons to update your estate plan after certain life events.
1. Changes in Family Dynamics
Family dynamics change over time, and any changes should be reflected in your estate plan. Key events that might necessitate an update include:
– Marriage or Divorce: Texas is a community property state, meaning that any assets acquired during the marriage are considered jointly owned by both spouses. If you get married or divorced, it’s crucial to update your estate plan to reflect changes in asset ownership, community property, and how those assets should be distributed.
Additionally, Texas law does not automatically update your estate plan to reflect divorce. Therefore, it’s important to actively update your documents to exclude an ex-spouse if that’s your wish.
– Birth or Adoption of a Child: Texas law allows you to name guardians for minor children in your will. It’s important to update your will to ensure that the new child is included and that a suitable guardian is designated. In Texas, if you don’t have a will, the state will determine guardianship based on its laws.
– Death of a Beneficiary or Executor: In Texas, if a named beneficiary or executor dies, you will need to update your estate plan to appoint a new executor or alter the distribution of your estate accordingly.
2. Significant Financial Changes
Your financial situation may change dramatically over time, meaning your estate plan should reflect those changes as well:
– Increase or Decrease in Assets: Texas does not have a state estate tax, but federal estate tax laws apply. Significant financial changes, such as acquiring or selling property, will impact your estate plan and may require updates to address changes in asset distribution, especially for federal tax planning purposes.
– Business Ownership: If you own a business, Texas law requires specific provisions for the management and distribution of business interests. Updating your estate plan to address business succession is essential to ensure a smooth transition.
3. Changes in Relationships
Relationships evolve, and your estate plan should adapt accordingly to reflect any of the following:
– Estrangement or Reconciliation: Texas law does not automatically adjust your estate plan based on personal relationships. If you become estranged or reconcile with someone important, you need to proactively update your estate plan to reflect these changes.
– Naming New Guardians or Trustees: You can name or change guardians and trustees in your Texas will or trust documents. It’s important to regularly review these designations to ensure they align with your current preferences.
4. Legal and Tax Law Changes
Estate planning laws and tax regulations change, impacting how your estate is managed and taxed:
– Changes in Estate Tax Laws: While Texas does not have its own estate tax, federal estate tax laws apply. It’s important to stay updated on changes to federal tax laws and review your estate plan with an attorney to optimize tax efficiency.
– New Legal Provisions: Texas occasionally updates its estate planning laws, including changes to homestead laws, probate procedures, and powers of attorney. Keeping abreast of these changes ensures your estate plan remains compliant and effective.
5. Health Changes
Your health and the health of your loved ones has an influence over your estate planning decisions:
– Declining Health and Disability: In Texas, it’s crucial to include advance directives, such as a medical power of attorney and a living will, in your estate plan. These documents help ensure that your healthcare wishes are respected if you are unable to communicate them yourself.
6. Physical Relocation
Moving to a different state or country can have significant implications for your estate plan, such as:
– Different State Laws: If you move to Texas from another state, you should review and potentially update your estate plan to align with Texas laws, including Texas’s community property laws and specific requirements for wills and trusts.
– International Moves: Moving internationally adds complexity, such as potential issues with foreign inheritance laws and estate taxes. It’s essential to address these considerations and update your estate plan to comply with both Texas and international laws.
7. Changes in Personal Preferences
As your personal preferences and goals change over time, your estate plan should reflect these shifts:
– Charitable Goals: Texas allows for charitable bequests in wills and trusts. If your charitable goals change, you should update your estate plan to ensure that your donations are distributed according to your updated preferences.
– Distribution Preferences: If your wishes for asset distribution change, ensure that your will or trust documents are updated to reflect your current desires.
Additional Important Reasons to Update Your Estate Plan with an Attorney
Estate planning is not a static task but an ongoing process that must evolve with your life. Regularly reviewing and updating your estate plan ensures that it remains aligned with your current life circumstances and goals. By staying proactive and making necessary adjustments, you ensure that your wishes are honored, and your loved ones are provided for in the way you intend. Texas estate planning can be intricate, especially with considerations like community property laws, specific probate rules, and the absence of a state estate tax.
If it has been a while since you last reviewed your estate plan, consider scheduling a consultation to discuss any updates that may be needed. I recommend that you review your estate plan at least every three years. If you are a current client of Bromlow Law, PLLC, we do complimentary 3 year reviews for our clients. Together we will make sure that no one is forgotten or left out, and that your estate plan reflects your long-term goals.
Bromlow Law, PLLC and Laura L. Bromlow, are dedicated to the practice of Elder Law and Estate Planning. Our practice focuses solely on working with clients in these and closely related legal fields. Laura L. Bromlow is a Certified Elder Law Attorney with the National Elder Law Foundation. Bromlow Law, PLLC strives to enhance communication among family members and loved ones and to keep them all out of conflict so they can stay out of court. We want to help you keep your close circle safe!
Please contact our office today at (281) 665-3807 to schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.