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Update Your Will or Trust After These 5 Major Life Events

October 19-25th marks National Estate Planning Awareness Week, which seeks to educate the public about the importance of having an estate plan should death or incapacity occur. However, Bethesda attorney Nicole White warns that an outdated estate plan can actually be worse than having no estate plan at all, prompting people to re-evaluate how they maintain their documents through the years.

Bethesda, MD - October 19th-25th marks National Estate Planning Awareness Week in the United States. The observance seeks to educate Americans about the importance of having proper estate planning documents in place should death or incapacity suddenly occur.

Estate planning is one of the most overlooked areas of personal financial management. According to the National Association of Estate Planners and Counselors, it is estimated that over 120,000,000 Americans do not have up-to-date estate plans to protect themselves or their families in the event of sickness, accidents, or untimely death. Furthermore, according to a 2004 survey by Lawyers.com:

• 69% of adult Americans do not have a Living Will or Advance Medical Directive

• 58% of adult Americans do not even have a basic Last Will and Testament

• Only 21% of adult Americans have established a trust for estate planning purposes

Yet the most shocking statistic, according to Bethesda estate planning lawyer, Nicole White is how many Americans believe that their estate plan does not have to be updated as their life changes through the years. That, according to White is the reason up to 95% of estate plans will fail when families need them the most.

“Contrary to popular belief, an estate plan is not something you “do” once and then stick it in a drawer never to look at again,” says White. “It’s just the opposite-- your plan has to be reviewed as your life, and the law changes through the years,” she adds.

According to Nicole White, there are 5 major life changes that typically warrant an update to your estate plan. They are:

1. Marriage, Remarriage or Divorce- “We’ve all seen the consequences of not updating an estate plan in high profile cases such as Gary Coleman’s or Dennis Hopper’s,” says White. White warns that the failure to update your estate plan to reflect changes in marital status could cause an ex-spouse, an unexpected third party or a spouse’s children from a previous marriage to wind up with your inheritance if the unthinkable happens.

2. Birth of a Child- According to White, your estate plan should always be updated following the birth of a child to ensure he or she is not disinherited under your current plan. White explains that the birth of a child is also a great time to legally name guardians for your child’s care should something happen to you.

3. A child becomes disabled or diagnosed with special needs- According to White, an estate plan must also be updated upon the discovery that a child is disabled because leaving money outright to a child with special needs may jeopardize their ability to qualify for Medicaid or other benefits in the future.

4. You enter a same-sex or non-traditional relationship- White always advises those in same-sex or non-traditional relationships to review and update their plan often to ensure partners and children stay physically and financially protected should death or incapacity suddenly occur.

5. Purchase or sale of real property- According to White, your estate plan should always reflect the recent sale or purchase of property to ensure it is properly distributed to the people you want, in a way you want, should something happen to you.

“As a rule of thumb, I always advise clients to pull their plan out of the drawer every 2-3 years to make sure everything is exactly how they want it should the unthinkable happen,” says White. “I would ask myself questions like, ‘Am I still happy with the guardians I named for my kids? Is my ex-spouse still entitled to receive half of everything I own if something happens to me?’ These are all important questions that could costyour family thousands of dollars and years of headaches if not caught in time,” says White.

For more information on Montgomery County estate planning attorney Nicole White, please visit http://www.kinseylawgroup.com or call (301) 968-1630.

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