You have got an estate plan, and unlike more than 60% of Americans, you have secured your family’s future. That said, an estate plan isn’t something you can create and never think about again.
An out-of-date estate plan means you may not be able to distribute your assets as you wish, end up paying higher taxes, and leave your loved ones exposed to family disputes. As your life changes and laws evolve, you will need to update your estate plan accordingly.
Let’s talk about the 10 signs you need to update the estate plan, focusing on Utah’s laws.
1. Major Life Events Like Marriage, Divorce, or Remarriage
In Utah, a change in your marital status is one of the biggest reasons to update your estate plan. Getting married often means you want to include your spouse as a primary beneficiary in your estate plan. This includes updating beneficiary details for your life insurance, bank accounts, credit cards, and retirement accounts.
On the other hand, divorce typically means removing your ex-spouse as a beneficiary or decision-maker. Remarriage typically requires more complex arrangements if you have children from previous marriages or new joint assets with your spouse.
You might want to speak with an estate planning attorney in Utah if you face a complicated situation like this. They can help you update your estate plan to reflect your marital status and relationships.
2. The Birth or Adoption of a Child
Welcoming a new child, whether through birth or adoption, is a joyous event that should be reflected in your estate plan. When a new child enters your family, update your estate plan to make changes like:
- Name guardians for your child
- Create a trust to secure your child’s future
- Add the child as beneficiary wherever necessary
If you already have an estate plan in place, you may need to make adjustments to reflect additional heirs. Speak with your estate planning attorney to understand how you can change your estate plan.
3. Death of a Beneficiary or Heir
Have you recently lost a loved one? If a beneficiary, executor, or guardian named in your will or trust passes away, your estate plan should be revised to name a replacement. An outdated estate plan could lead to confusion, delays, or even legal challenges when administering your estate.
4. Changes in Financial Status
If your financial situation has changed significantly, it’s a good idea to revisit your estate plan. This could be a windfall like an inheritance, a significant increase in your net worth, a business sale, or an unexpected financial downturn.
With increased wealth, you may want to think about more tax-efficient strategies, charitable giving options, or trust arrangements. In contrast, a loss of wealth may require you to update your estate plan to reflect reduced distributions.
5. Moving to a Different State
Each state has its own estate and probate laws. If you plan to move in or out of Utah, it may render parts of your existing estate plan outdated or even invalid. If you are relocating to another state, be sure to consult a skilled attorney and see how this move will affect your estate planning goals. Depending on your circumstances, you might need to update your estate plan or create a new one from scratch.
6. Changes in Federal or State Tax Laws
Tax laws change frequently. Currently, assets worth $13.61 million or more per individual are subject to federal estate tax, but this exemption amount is scheduled to change at the end of 2025. Thankfully, there is no state estate tax in the Beehive state as of today.
However, these tax laws can change over time. You have to keep an eye on the latest changes in tax exemptions. Updates to federal estate tax exemption limits, gift taxes, or changes at the state level could mean revisiting how you distribute your assets.
7. A Change in Your or Loved One’s Health
It’s not always divorce or death. Sometimes, a serious illness such as cancer or a devastating car crash can also affect your estate plan. Depending on your situation, you may want to create or modify healthcare directives, establish a power of attorney, or address new needs due to disability, medical costs, or long-term caregiving.
8. Children Reaching Adulthood or Life Milestones
If you created your estate plan when your children were young, you might have established trusts or guardianship that are no longer applicable once they reach adulthood. Adult children often have new needs, such as help purchasing a home, starting a business, or paying for higher education.
You may want to adjust or remove age restrictions on asset access, involve them in decision-making roles, or exclude adult children if circumstances dictate. Additionally, you might want to reconsider how and when they receive their inheritance.
9. Changes in Relationships or Family Dynamics
Over time, family dynamics can change. Perhaps you have developed a closer relationship with one child, experienced estrangement, or wish to recognize the efforts of a grandchild or a new loved one. Significant changes like these may require updating your estate plan to reflect your current wishes.
10. Changes in Beneficiaries’ Needs or Circumstances
You may have beneficiaries whose circumstances have changed dramatically. For instance, if one of the beneficiaries is struggling with substance abuse, financial irresponsibility, or other personal issues, you may want to update your estate plan to reflect these changes.
On the other hand, you may wish to revise your plan to include beneficiaries with special needs, creating a trust that provides for them without disrupting their eligibility for state or federal assistance.
Conclusion
Updating your estate plan isn’t just a “one-and-done” task. It’s a lifelong commitment to ensure your assets and legacy are preserved according to your wishes. Make it a habit to review your estate plan every three to five years or whenever major life changes occur. Keep your beneficiaries and executors informed of the changes you make to your estate plan. Finally, work with an estate planning attorney and a financial advisor to navigate complex situations and ensure compliance with tax laws.
If you are looking for an estate planning attorney in Utah, look no further than Jeremy Atwood Law. Our attorneys will help you create a customized estate plan that reflects your wishes and prevents unnecessary family disputes. Contact us today to schedule your consultation!
