Important Life Decisions
There are several important life decisions that you should factor into your estate plan. They include:
- Getting married: Estate planning after tying the knot does not have to be complicated. Simply updating your beneficiary information, purchasing a life insurance policy, and updating emergency contact information are all things that should happen right away. You should also consider preparing a will and a living will. As your marriage progresses, it may make sense to consider a revocable trust as well. Having discussions with your spouse about how you want your estate to be managed depending on different scenarios is also important.
- Getting divorced: While couples do not plan for divorce, many spouses go through this process. For many, the emotional toll and legal complexities of divorce can be overwhelming. Oftentimes estate planning is overshadowed by the divorce, resulting in unintended consequences. Making sure you make changes to your estate plan as soon as your divorce proceedings have been finalized will make sure your ex will not end up with the house, life insurance proceeds or other assets of yours. Here’s a more detailed look at how to update your estate plan when going through a divorce.
- Buying life insurance: These policies are present in virtually all estate plans and serve as a useful source of liquidity, education-expense coverage, and financial support for your family or loved ones. If you are buying additional policies, it’s important you know how much insurance and what kind is important. You can watch our video here to learn more. No matter what level or types of life insurance you have, make sure to list all beneficiaries under the policy and make sure to update them as time passes.
- Buying or refinancing a home: When you purchase or refinance a home or other real estate, you should always make sure the asset is titled appropriately. If you use a trust, sometimes a lender will take a property out of a trust during a refinance. The key is to make sure your title furthers your goals.
- Having a child: While adding another member to your family is an exciting time in your life, it is not an excuse to forget to update your estate plan. A new child necessitates major revisions to your estate plan. This not only affects who will inherit your estate upon your death but will also require you deciding who will be the guardian of your children if you should die before they become adults. As your child grows and matures — and more children are added — your estate plan will likely continue to change. Follow these steps when planning for your young children.
- Starting a business: If you start a business or ownership interest changes in a current business, you need to understand what impact these changes have on your estate plan. Even more, there may be tax implications that could affect your heirs without proper planning ahead of time. Learn about how to protect your business here.
- Death of a loved one: The passing away of someone listed in your will is often overlooked in estate planning. These individuals may be named guardians to your children, have an inheritance allocated to them, be designated as emergency contacts, or may be named as executors of your estate. Leaving the role vacant can have terrible unintended consequences and necessitates transitioning new people to fill the void left behind by your loved one’s death right away.
- Moving to another state or country: When you change your residency from one state to another, especially when moving to California, you must review your estate plan to make sure it conforms with local laws. The same is true if you move to another country. Likewise, if you have property in more than one state or country, special attention must be paid to how those assets will be distributed according to your estate plan and applicable law. You can read more about the impact of moving on your estate plan here.
- Change in work benefits: Whether this happened through a promotion, demotion, or your employer just changed the benefits they offer, this could impact the type amount of assets you have available. Look at your estate plan to see if your goals are still achievable or if you can do more with what you have.
Planning based on your life stages is important because your circumstances over the years will surely change whether you live in Orange County, Southern California, or anywhere in the country. If you have any questions about estate planning — or have had to make a recent big decision in your life — contact us to learn more about your options.
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Kevin Snyder is a husband, father, and an Orange County estate planning attorney and elder law attorney at Snyder Law, PC in Irvine, California. He is all about family and is passionate about educating his community about trust and estate planning, veterans issues, and how to protect what matters most – family, assets, and legacy.