Estate planning is important, but it’s important not to make the plan and then move on. Your estate plan can provide you with many benefits, but those benefits only exist if the plan reflects your wishes, your current life situation, and any new laws. A Springfield estate planning attorney can help you ensure that your estate plan is enforceable. They can also let you know what changes may be applicable based on the passage of time or changes in your life.
Financial and estate planning professionals tend to recommend that you review your estate plan every three to five years. This can address any changes to your personal wishes and tax laws.
In addition to this regular review, you should review the plan after significant life changes. These life changes can alter your beneficiaries, powers of attorney, executor, and trustee, as well as your assets and debts. Estate planning documents must account for these changes. Some of these major life changes include:
Marriage
A marriage is an important and joyous moment of your life. It is also a very significant financial and life change that can affect your estate plan. Many people take this opportunity to make their spouse their primary beneficiary, their successor trustee, and/or powers of attorney designee. You may want to leave different assets to your spouse than they would receive under intestate law.
A marriage also changes the people who make up your family. You may wish to add your spouse’s family as beneficiaries. If you or your spouse have children from prior marriage, an estate plan can clearly state which assets are their inheritance. You and your spouse may also want to create a joint estate plan.
Divorce
Getting a divorce changes your finances, your relationships, and many other parts of your life. You may wish to remove your ex-spouse as a primary beneficiary or otherwise change what they and their family receive from your estate. You may also want to change other designations, like power of attorney.
Divorce can have a severe enough effect on your assets to render your estate plan unenforceable. In divorce, marital assets are split, either according to spousal wishes in a separation agreement or by equitable distribution laws. You may have listed assets in your estate plan that you no longer own. If enough of your estate plan cannot be implemented, the entire plan may be voided. Avoid this by reviewing and updating your plan.
Familial Additions
Familial additions include the birth or adoption of a new child or grandchild, along with the marriage of other members of your family. You may wish to include these new members of the family as beneficiaries. For children, this may require special planning. A trust can place an adult in charge of the assets that you wish to leave to your children until they are of age. You may also want to designate a guardian for minor children in your will.
Familial Losses
It’s important to review your estate plan following the death or estrangement of a loved one. Several documents may list that individual, and these should now be updated. If you do not have updated or contingent beneficiaries, the assets left to someone who is deceased could pass to the state.
Financial Gains and Losses
Significant changes to your assets and debts may include:
- Purchasing a home
- Beginning or investing in a business
- Buying a vehicle
- Investing in real estate
- Taking out student loans
When these changes occur, your estate plan should account for them.
Retirement
Retirement means that you have significantly less income, but you now have access to your retirement account. Retirement is also a good time to consider creating a living will or powers of attorney if you have not already done so.
Other Life Changes
You should also review your estate plan for other changes in your life, including:
- You have moved to a new state.
- You have acquired property in another state.
- A minor child or grandchild turned 18.
- You or a loved one has suffered an illness or developed a disability.
- There have been changes to your employment or income.
FAQs
Q: When Should You Revisit and Possibly Revise Your Estate Plan?
A: You should look over your estate plan every 3 to 5 years to determine if there have been any changes over time. There are three main reasons why you would want to update your estate plan:
- Your life has changed in ways that have altered who you wish to manage or receive your estate. These include marriage, divorce, births, and deaths.
- There have been changes to inheritance or estate planning law that impact your estate.
- Your wishes and needs have changed because time has passed.
Q: How Long Does an Executor Have to Settle a Will in Illinois?
A: In the probate process, the longest waiting period is six months, which is when Illinois law allows unknown creditors to make their claims on the estate. Because of this, probating an estate from opening to close will take at least six months. However, it often takes longer. The probate process can take up to a year or even longer, especially if assets are hard to find or difficult to value, or there are contests against the will or trust.
Q: How Much Does an Estate Have to Be Worth to Go to Probate in Illinois?
A: In Illinois, an estate can qualify for a small estate affidavit if it has less than $100,000 in liquid assets, personal property, and real property. A small estate affidavit is presented to the individual or agency that holds a deceased person’s assets. Estates that are more highly valued will go to probate unless they have established estate planning documents to avoid probate. For example, assets in trusts do not enter probate.
Q: How Do You Update a Will in Illinois?
A: To update a will in Illinois, you must either:
- Amend it with a codicil.
- Create a new document.
A codicil is typically used for smaller changes, while the creation of a new will is for more significant changes. Both of these modifications require the presence of witnesses to be valid, just like the initial creation of the will. It can be helpful to work with an attorney to ensure that the changes you are making to the document continue to be enforceable.
Reinforcing the Benefits of an Estate Plan
At Stange Law Firm, our attorneys have significant experience in estate planning and the ways that life changes may affect it. Contact our firm today to see how we can help.
