Life changes can impact your estate plan. Learn why updating your plan after major events like marriage, divorce, or financial shifts can be important to managing your wealth and wishes.
Why Updating Your Estate Plan May Be Important After Life Changes
Estate plans are meant to reflect your current life and financial goals, but they’re often left unchanged after major events. Marriage, divorce, children, business changes, or health issues can significantly impact how your wealth should be managed and distributed. If an estate plan isn’t updated, assets may not go to the intended beneficiaries, tax burdens may increase, and key financial or medical decisions could be left in the wrong hands.
Regular updates to your estate plan may potentially help protect loved ones and keep financial plans aligned with current goals.
Major Life Changes that Require an Estate Plan Update
A major life event is an important signal to review estate planning documents. Here are some changes that may prompt an update:
Family Changes
- Marriage – Naming (or not naming) a spouse in an estate plan allows the spouse or other beneficiaries to inherit assets as intended.
- Divorce – Failing to remove an ex-spouse as a beneficiary could result in unintended asset transfers.
- New Children or Grandchildren – Updating an estate plan allows for intended inheritance designations that reflect family growth.
- Death in the Family – If a beneficiary or fiduciary in your estate plan passes away, revisions may need to be made to specify asset redistribution or revise fiduciaries.
- Family Dynamics – Relationship changes may require updating beneficiaries, guardians, or other fiduciaries.
Financial Changes
Shifts in wealth, investments, or debt can impact estate distribution and tax planning:
- New Assets or Losses – Significant financial gains or downturns may require adjustments in how assets should be distributed, tax, and inheritance planning.
- Business Ownership – Selling, acquiring, or passing on a business should be clearly documented.
- Inheritance or Windfalls – Large financial gains may need to be incorporated into long-term wealth transfer strategies.
- Investment Portfolio Shifts – Adjustments may be needed to balance risk, manage tax efficiency, or distribute new holdings.
- Debt Considerations – Liabilities may affect asset protection strategies and estate tax planning.
Health and Capacity
Medical changes can impact estate planning in several ways:
- Serious Illness or Disability – A new diagnosis may require changes in healthcare directives or long-term care planning.
- Power of Attorney Updates – If a designated financial or healthcare decision-maker is no longer a suitable choice, appointing a new agent is crucial.
- Long-Term Care Needs – Updating financial plans to account for medical expenses or assisted living can protect assets from depletion.
Geographic Relocation
Moving to a new state or country can impact an estate plan due to differing laws:
- State-Specific Laws – Probate, tax rules, and inheritance laws vary by state and may require new legal documentation.
- International Considerations – Assets held in multiple countries may need specific estate planning structures to potentially avoid complications.
- Property in Multiple Jurisdictions – Ownership laws differ across locations, affecting how real estate and other property are transferred.
How Often Should an Estate Plan Be Reviewed?
A general review every two years, with a more detailed review every five years, is a good rule of thumb. However, any significant life change should trigger an immediate update. Estate planning documents should reflect the most current financial, family, and health situations.
Estate plans are flexible and may be updated as often as necessary. Regular reviews help prevent legal disputes, tax inefficiencies, and asset distribution mistakes.
Practical Steps for Updating an Estate Plan
- Review Beneficiaries – Confirm that all designated beneficiaries align with current wishes.
- Update Legal Documents– Modify wills, trusts, and power of attorney documents as needed.
- Adjust Financial Plans – Align estate planning with new income sources, investments, and tax strategies.
- Reassess Named Parties – If chosen representatives are no longer suitable, select new individuals (or possibly a corporate trustee or private fiduciary) for certain roles.
- Address Business Succession – Business transfer plans should be legally documented and aligned with estate goals.
Intended for a smooth update process, working with a financial advisor alongside an estate attorney can help keep financial and legal aspects in sync.
Risk Management in Estate Planning
Unaddressed risks can lead to disputes, unnecessary taxes, or unintended asset distribution. Financial advisors can guide you in:
-
Asset Protection – Strategies to safeguard wealth from creditors, lawsuits, or excessive taxation.
-
Family Conflict Prevention – Clear documentation to reduce disagreements and legal challenges.
-
Charitable Giving Strategies – Tax-efficient ways to include philanthropy in an estate plan.
Start updating your Estate Plan Today
Life changes fast, and estate plans should keep up. Reviewing and updating documents regularly helps protect assets, clarify intentions, and streamline wealth transfer.
If you’ve experienced a major change in family, finances, or health, schedule a review with an EP Wealth estate planning advisor today.
DISCLOSURES:
- EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.
- Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
- Hiring a qualified advisor and/or financial planner does not guarantee investment success, and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any direct or implied results or projections being represented here will be met or sustained.
- The need for a financial advisor or financial planner and/or the type of services required are specific to the uniqueness of each individual’s circumstances. There is no guarantee or warrantee that the services offered by EP Wealth Advisors, LLC will satisfy your specific financial services requirements. Services offered by other advisors may align more to your specific needs.
- All investment strategies have the potential for profit or loss. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be suitable or profitable for a client’s portfolio. The risk of loss can never be eliminated even if working with a professional.
- An estate plan is a helpful tool that can assist individuals in managing and arranging affairs in the event of death or incapacity. However, the scope and extent of the plan varies depending on the unique circumstances and desires of the individual client. It is for this reason, that the analysis encompassed herein is not intended to be comprehensive in nature nor should it be interpreted as legal advice. Please consult a legal professional to determine the extent, scope, and the drafting and creation of the appropriate estate documents. EP Wealth Advisors is not in the business of providing legal advice or preparing legal documents. Our review is limited to and in association with Financial Planning only.
- Laws vary by state. The information presented herein is intended to be general in nature and may not apply to your state of domicile. Please consult local legal counsel to determine the best practices for your state.
- Please consult with a CPA, tax professional, and/or attorney regarding your specific situation before implementing any of the strategies referenced directly or indirectly herein.
- Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
