There are many different life events that signal that it is time to review an estate plan. A serious medical diagnosis is one common example, as it may be necessary to adjust a medical power of attorney or a do-not-resuscitate (DNR) order. Major financial changes, such as selling a business or a home, can also trigger a review since assets may need to be distributed differently after the sale.
For those who have just become grandparents, it may also be time to revisit the plan. Why is it helpful to review an estate plan as the family expands?
Adding new beneficiaries
The most obvious reason is that new beneficiaries may need to be included in the estate plan. Previously, an individual may have only listed their direct descendants. However, with the addition of a new grandchild, they may want to set aside specific assets for them. This could involve reallocating assets from other beneficiaries or adjusting the distribution across the board.
Additionally, it is important to note that minors often cannot directly inherit assets. Special considerations are needed when adding them to an estate plan. For example, a grandparent may choose to place assets into a trust that will hold those assets until the grandchild turns 18. This ensures that the new beneficiary will inherit without complications. Simply naming them in the will may not be enough if they are too young to legally inherit, so it’s critical to take these steps in advance.
As you can see, estate plans often need to be reviewed and updated for many reasons. Be sure you know the legal steps to take at this time.