Estate planning creates a path for the future and assures that your assets are in the right hands when you die. Since your financial and personal situations are ever-evolving, so should your will to accommodate these changes. Below are a few crucial life moments that require you to revisit your will.

Key Circumstances to Update Your Will

1. Change in Relationship Status

Estate planning should be an immediate priority when you get married or divorced. While not the most romantic step in a relationship, it assures that your assets in their entirety end up with the people you care about the most. Without one, everything will end up in probate court to decide who should take ownership of your property, or worse—your assets will end up in the hands of your ex.

2. New Children

Similar to a marriage, you will want to include your new child in your will to give them certain assets, but it is also vital to assure they’re taken care of if you unexpectedly die. You can appoint a guardian in your will who will care for your minor children in this situation, as well as manage the assets willed to them until they become of age. This person is usually a trusted relative or friend who is financially capable of the responsibility. You should also include a backup guardian in case your initial choice is unable to fulfill the obligation. You can name two guardians in the will if you want a married couple of friends or family to care for your kids, but make sure to update this stipulation if they divorce. 

Your estate planning should also get an update when you become a grandparent if you plan to will any assets to your grandkids. Like with your kids, it’s essential to have this new addition to the family covered if their parents die before you.  

3. Poor Health

When your health takes a negative turn, taking appropriate steps with estate planning is as essential as ever. Have your lawyer review your will and update if necessary, to give yourself and your family peace of mind during this potentially later stage of your life.

Before you are no longer of sound mind or physical health, you should also assure that you have a rock-solid power of attorney in place to give a trusted agent the ability to manage your finances and legal affairs on your behalf. On the same tangent, a health-care proxy will have the power to make medical decisions on your behalf. The agent will act based on your wishes outlined in these stipulations. 

4. Drastic Changes in Wealth

Any major event—good or bad—that has a substantial impact on your estate should call for an update to your will. These changes can come from winning the lottery, investing successfully in the stock market, selling a major asset, starting a business, or having a fortune willed to you by a relative.

Currently, the law allows you to gift up to $5.12 million tax-free in your lifetime, and then you must pay a 35% tax on any additional funds. A way to sidestep that is if you have a promising investment or a business that is expected to explode in the near future. If you can afford to shift some holdings of your growing investment to family or a trust before it increases in value, only the initial value of the assets will contribute to this pre-tax value, even if they appreciate significantly over time.

Beyond life’s big moments, you should annually check in with your attorney in charge of your estate to keep your affairs in order. The Law Offices of Drew F. Davis have provided comprehensive estate planning for residents of northwest Missouri for over 20 years, maintaining open lines of communication to assure you properly handle your will. For those needing to make an initial draft of their will, their attorneys will invest their time and skill into the process to create a strong foundation for the future of your assets. For more information about this firm’s full range of legal services and to schedule a consultation, call (816) 632-7575 today or visit them online.