As we talked about last week, many view estate planning as something you complete one time and then check off your to-do list for good. But the reality is that to keep your estate plan working for you, your plan needs to change when your life changes.
To make sure any big changes in your life are considered in your plan, I recommend reviewing your estate plan with your attorney at least every three years. But if any major life events happen before then, it’s crucial to have your plan reviewed as soon as possible so it can be updated as needed.
Last week, we started to explore 10 life events that might affect your estate plan. This week, we’re talking through five more life events that mean it’s time to review your plan.
06 | You Became Seriously Ill or Injured
A sudden illness or injury can leave you incapacitated and unable to manage your affairs. Therefore, it’s essential to review your estate plan to ensure it includes Powers of Attorney for healthcare and finances. These documents let you name someone you trust to pay your bills and manage your assets, as well as make medical decisions for you if you can’t speak for yourself.
It’s also important to include healthcare directives that describe what kind of healthcare you want if you become incapacitated. This can include dietary restrictions or preferences, religious beliefs, or limits to certain treatments or life-sustaining measures. By legally documenting your healthcare choices, your Power of Attorney will feel more comfortable in the role and will be able to make medical decisions for you that align with your wishes.
07 | You Moved To Another State
Each state has its own laws and regulations regarding estate planning, so if you recently moved to Illinois from another state after completing your estate plan, it’s crucial to have your plan reviewed by a local attorney. If your existing plan doesn’t meet our state’s requirements for how an estate plan is signed or witnessed or contains terms or processes that differ from the processes of our state, this can cause delays when your plan needs to be used and may even require a court to review its validity.
Reviewing your plan with a local attorney and making any changes to comply with the laws in your new state will make sure that your estate plan can be relied upon at any moment without delay or confusion.
08 | You Got Married
Marriage brings about not only joy and celebration but also important legal updates that are easy to put off. When you tie the knot, your estate plan needs to reflect your new marital status. To make sure your assets will go to your new spouse if you die or become incapacitated, it’s essential to update beneficiaries and make arrangements to adjust the status of certain assets as “shared”. Additionally, you might consider creating provisions to protect your spouse financially and emotionally in the event of your passing.
09 | You Got a Divorce
The end of a marriage is a significant life event that requires immediate attention to your estate plan. After a divorce, you’ll likely need to revoke and redo your entire estate plan. This includes creating a new Will and Trust, updating beneficiary designations on life insurance and retirement accounts, and revising asset distribution to reflect your new circumstances and relationships. If you have children from your previous marriage, you may need to revisit guardianship arrangements and provide for their financial needs accordingly.
10 | The Law Changed
Tax laws are subject to change, and revisions to estate tax exemptions can have a substantial impact on your estate plan. If there are significant changes in federal or state estate tax laws, it’s crucial to review your plan with an estate planning attorney to minimize tax burdens and protect your wealth for your loved ones. Particularly if you live in Illinois, you will want to keep track of the potential tax liability at a state level as there is currently a much lower dollar amount threshold for payment of Illinois estate taxes than there is at the federal level. Make sure your plan is reviewed by a lawyer you trust to make sure you are taking advantage of all the opportunities in Illinois to reduce your estate’s potential tax exposure.
Even if you weren’t affected by federal or state estate taxes in the past, changes in federal estate tax law are scheduled for 2026, so now is the time to review whether this change will affect your family’s estate tax filing status. Estate taxes can cost your family tens or even hundreds of thousands of dollars, but these federal tax liabilities can be mitigated or altogether avoided with proper estate planning.
By Your Side Through All of Life’s Changes
Your estate plan serves as the bedrock protecting your family and finances, not just for today but also for the future. However, estate planning isn’t a one-time task – it should adapt and evolve alongside the changes in your life. O’Brien Estate Law’s mission is to be by your side through all of life’s changes, ensuring your estate plan remains up-to-date and effective no matter what life brings your way. That’s why I will review your estate plan, at no charge to you, once every three years. If you experience any of these life changes that I’ve written about, I encourage you to reach out now to discuss your questions about life changes or other events that might affect your plan.
If you’re ready to create an estate plan that protects your loved ones and your legacy, or want your existing plan reviewed, schedule a call at this link. I’d be honored to help ensure your family’s well-being for years to come.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. You should seek legal advice specific to your needs from a lawyer you trust before making any changes to your estate plan.