While there are some obvious steps that many people in California take to plan for their financial future and the future of their family, even in the event of their death, there are a variety of life circumstances that require that such steps be carefully reviewed and evaluated. What are some of these important life changes that require a review of estate planning documents?
A first or subsequent marriage is a key factor. There is a new significant person whose needs must be taken into consideration. If both the husband and wife are going to enter the marriage with significant economic assets, they may wish to consider whether a prenuptial agreement is right for them. In any event, they should be aware of how the marriage may have an impact on their property rights–both on what may still be considered separate property, and on what assets may be regarded as marital property. The issues may be different for couples residing in community property states.
The flip side of this, of course, is that the termination of a marriage, whether because of the death of a spouse or because of a divorce, may require that beneficiaries on accounts, trustees on trusts, and designated persons on powers of attorney be changed.
Individuals or couples who have a living trust for the purposes of avoiding probate may need to take steps to may sure that a significant new asset, such as a newly purchased home, is covered by and owned by the trust. This is something that often gets fouled up during a mortgage refinance, when the new mortgage put in place is not placed into the trust, effectively losing its protection.
The birth or adoption of a new child, or the receipt of a significant inheritance, are other major events which should trigger a review of estate planning documents. Keep in mind that any estate plan may incomplete if it does not have other items such as a health care directive, power of attorney provisions and long-term care planning.
Source: Forbes, “5 Life Events That Require An Estate Planning Review,” Michael Chamberlain, Aug. 13, 2012
Our Los Angeles law firm represents individuals with a full range of estate planning needs including wills, trusts, gifts and long-term care issues such as those mentioned in this posting.