It's time to update your estate planning documents if you have experienced a big change in your life. Your estate plan should be tailored to your current family and financial situation, not the one you faced five years ago or maybe even just last year.

Below is a review of some events that should prompt you to revisit your estate plan and review your beneficiary designations for insurance policies, bank accounts and retirement accounts. And don't forget to review the individuals named in your will as guardians, personal representatives and trustees, as well as other documents, such as your Living Will, Health Care Surrogate designation and Power of Attorney, to ensure that those named are still appropriate to serve in their respective capacities.

·      You get married. You and your new spouse should create new estate planning documents such as wills and trusts when you get married. In Florida, your spouse is legally entitled to claim a percentage of your property after you die, unless you have a written agreement to the contrary. 

·      You are unmarried, but have a (new) partner. Without a will or alternate estate plan, such as a living trust, your partner will inherit nothing. To avoid this, you and your partner should make a new estate plan.

·      You get divorced. In Florida, a final judgment of divorce (or an annulment) revokes provisions naming your former spouse as a beneficiary or appointment as personal representative or trustee on your behalf. Consequently, you should update your estate planning documents after a divorce. You also need to actively change the beneficiary designations on your life insurance policies and retirement accounts to name someone other than your former spouse or any other unintended beneficiary as divorce does not automatically revoke these designations.

·      You bring a new baby into the family. You'll want to make a new will to name a personal guardian for new children. This is the person you want to raise your child in the unlikely event that both you and the other parent become unavailable. You'll also want to consider establishing trusts for your new children.

·      You have new stepchildren. Unless you legally adopt stepchildren, they have no right to inherit from you in most situations. If you want to leave them a share of your estate, you should adjust your estate plan.

·      You have a new grandchild. You may want to consider adding specific bequests to your will and/or trust, establishing a 529 college savings plan or establishing a trust on your grandchild's behalf.

·      Your estate value increases or decreases. Anytime your overall wealth significantly fluctuates, you should update your estate plan to minimize your taxes and protect your assets. Also, if you've made specific gifts in your will or trust of property that you no longer own, you'll want to avoid leaving the intended beneficiaries out in the cold. (If you no longer own the property when your estate is dispersed, the beneficiaries are probably out of luck; they won't get anything in lieu of it.) Likewise, if you obtain new property and you want to leave it to someone specific, you'll need to change your will or trust to make your wishes clear.

·      You're married and move from a community property state to a common law property state, or vice versa. Community property and common law property states view the ownership of property by married couples differently. This means that what both you and your spouse own may change if you move from one type of state to the other.

·      You have recently moved to another state (Florida). If you're not married and you relocate to Florida from another state, you will want to make sure your estate planning documents take into account any differences in the laws of your new state of residence. As a general rule, the laws of the state where you die and where you own property will determine the distribution of your assets, including those under a valid will or trust. Also, states vary on their requirements for Living Will, Health Care Surrogate and Power of Attorney documents. Be sure that these documents follow the regulations of your new home state. 

·      Your family circumstances change. Certain events may warrant changing provisions in your will from outright disposition to disposition in trust. Factors indicating the need for a trust for certain heirs may include a lack of maturity or financial management skills, marital instability, concerns due to aging and potential senility, alcohol or substance abuse, tax concerns and the preservation of government benefits or creditor concerns for beneficiaries. These same considerations might call into question the appointment of a personal representative, trustee, guardian or other fiduciary.

·      You change your mind about who you want to inherit a significant portion of your property. If you decide to leave a share of your property to someone else, you'll need to create new estate planning documents.

·      The estate tax law changes. Be sure to review the January 2009 issue and subsequent issues of The Wealth Planning and Preservation Update to be alerted if and when changes are made to the federal estate tax laws.

Changing Estate Documents

Don't forget that some of your property may pass outside the terms of your estate planning documents. For example, individual retirement accounts, joint or payable-on-death bank accounts, stocks registered with a transfer-on-death form, and life insurance proceeds go directly to the beneficiaries you've named. If you've changed your mind about who you want to inherit these kinds of property, you'll need to change the documents on which you named the beneficiary.

Life is busy and ever-changing. Remember to revisit your entire estate plan once a year to see if the changes in your life necessitate changes in your estate plan.