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Why should I update my estate plan periodically?

On Behalf of | Jun 21, 2023 | estate planning |

Estate planning is not a one-time event, but a continuous process that requires periodic review and update. If you live in Maryland or own property here, you have specific estate planning needs that differ from other states.

Significant life events

Some of the most common triggers for reviewing your estate plan are significant life events, such as marriage, divorce, birth, death, disability or retirement. These events may affect your personal and financial circumstances, as well as your wishes for how you want your assets distributed and who you want to manage them.

For example, if you get married or divorced, you may want to change your beneficiaries, personal representative or guardian for your minor children. If you have a new child or grandchild, you may want to include them in your will or trust. If one of your beneficiaries or personal representatives dies or becomes incapacitated, you may need to appoint a new one.

Sale or acquisition of major assets

Another reason to review your estate plan is if you sell or acquire a major asset, such as real property, a business or an investment. This may change the value and composition of your estate and require adjustments to your will, trust or beneficiary designations. For example, if you buy a vacation home in another state, you may want to create a trust to avoid probate in that state.

Change in financial status

A major change in your financial status may also warrant a review of your estate plan. This could be due to an inheritance, lawsuit settlement, lottery win or a loss of income. Depending on the nature of the change, you may need to revise your estate plan to address tax issues, creditor protection, charitable giving or special needs planning. For example, if you receive a large inheritance, you may want to create a trust to protect it from creditors and taxes.

Moving from one state to another

If you move from one state to another, or own property in multiple states, you should review your estate plan to ensure that it complies with the laws of each state and avoids unnecessary complications. Different states have different rules regarding probate, taxes, property ownership, marital rights and other aspects of estate planning.

For example, if you move from Maryland to Florida, you may need to update your will to conform to Florida’s requirements for witnesses and self-proving affidavits.

Changes in state law

Finally, you should review your estate plan whenever there is a change in state law. For example, Maryland recently enacted a law that allows spouses to elect against their partner’s will and claim a portion of their estate regardless of what the will says.

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