Amend Your Estate Planning to Respond to Major Life Changes
Putting an effective estate plan in place is one of the greatest gifts you can give your loved ones. It can eliminate uncertainty, anxiety, and potential conflict after your death and ensure that you minimize the tax consequences for your heirs. But creating a solid estate plan is just the first part of the equation; it’s just as important to review your estate plan periodically and revise your will or trust when life changes affect your objectives.
Events That Necessitate Review of Your Estate Plan
As a practical matter, you want to review your estate plan on a regular basis to be sure that you can still achieve your goals with the tools you have in place. There are, however, certain events that should automatically cause you to take a close look at your estate planning:
- Marriage, divorce, or remarriage after divorce
- The death of a spouse or named heir
- The birth of a child
- A substantial increase or decrease in your net worth
Why You Should Revise Your Estate Plan If You Get Married
There’s a common misperception that your spouse automatically becomes your heir when you get married. A surviving spouse who is not named in a will or trust typically is entitled to somewhere between one third and one half of the estate, with the remainder going to other relatives. Under the community property laws in Texas, a surviving spouse inherits all of the deceased spouse’s community property but only one third of their separate property, unless otherwise stated in a valid will or trust.
If you get married, but you’ve been married before, you may face challenges dividing your estate between your new spouse and any children from the prior marriage. If you plan to leave specific assets to your children, it’s best that you amend your estate planning to carefully set forth what will go to your spouse and what will go to your children. Don’t leave your entire estate to your spouse with the hope that he or she will give certain assets to your children. You can include specific bequests in a new will or use other methods to pass property to your children:
- Make them beneficiaries of a trust
- Make them beneficiaries of a life insurance policy
- Make them joint owners of property
Why You Need to Revise Your Estate Plan When You Have a Child
If you have a minor child, you must plan for more than their financial security—you need to establish who will take care of them in the event your spouse is unable to do so. Accordingly, if you have a child or adopt a minor child, you should amend your estate plan to identify a legal guardian. If you don’t do so and your spouse is unavailable to act as guardian, the court will have to appoint someone to fill that role. It might be a family member, or it could be an unrelated party, but you won’t have any input into who will raise your child.
Why You Should Revise Your Estate Plan After the Death of a Spouse or Beneficiary
If you are married when you execute an estate plan, chances are good that your spouse is named as a beneficiary, guardian, executor, or some other key role. Though your estate plan may include provisions to address the death of a spouse or other beneficiary, it can become a complicated process that drags out the settlement of the estate. It’s best if you create new estate planning documents that clearly express your intentions.
Why You Should Revise Your Estate Plan If Your Net Worth Changes Significantly
One objective of estate planning is to minimize the potential tax burdens on the estate and on your heirs. The most effective tools to achieve this will differ depending on the size of your estate. Accordingly, if your net worth increases or decreases dramatically, you should look at whether different strategies might be better from a tax standpoint.
Contact the Estate Planning Attorneys at Bailey & Galyen
At the law office of Bailey & Galyen, we offer a free initial consultation to every client. For an appointment with an experienced Texas wills and trusts attorney, contact us by e-mail or call our offices at 844-402-2992. We will take your call 24 hours a day, seven days a week.
