The importance of creating a will cannot be stressed enough. Nearly 2.5 million Americans die each year, and many haven’t signed the general documents needed to protect loved ones. However, if you've taken this important step, you may be wondering how often you need to revisit your estate plan. The answer? At least every five years and more often if there's a change in the law, your finances, or your personal life.
For example, the current tax law declares that we can transfer up to $5.12 million tax-free during life or at death, which is adjusted for inflation. If you haven't revised your wills and trusts in the past 5 years, they may no longer accurately express how much money is destined for trusts benefiting children and grandchildren, rather than a spouse. Another example includes financial changes, whether you're expecting a huge success in finance or a promising investment, it's important to make the change to your will.
Below are a few situations in which you will need to update your will and living trust.
- Changes in the law
- Impending good fortune
- Financial setbacks
- Change in committed relationships
- Becoming a parent or grandparent
- Losing a spouse
- Declining health
When it comes to writing your will, this is something best left to the experts, as one small mistake can cost you loved ones a lot of money and frustration during an already-difficult time. Because laws vary from state to state, it's important to find a lawyer specific to your area – so if you live in California, you should be looking for a California probate attorney. While there is no exact "correct" time to write a will, people usually write a will after they are married or have children, as there is more at stake when they are in a state of financial stability. Do it early on in your adult life and be prepared to update it when there is a major change in the circumstances of your life, as listed above.