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When should I update my estate plan?

Marriage, death and divorce are definite times you should review your estate plan. Here are some others.

Woman sits in front of laptop, reviewing her estate plan.

Major life events such as the birth of a child or a death in the family are widely known to be important times to revise your estate plan. But there are other, potentially less obvious situations that may lead to changes in your plans. Here are four scenarios that could trigger a review:

A significant change in your income or net worth

A gain (or loss) of income could mean adjusting your estate plan, particularly any life insurance policy you might have in place. You may also need to adjust your plan if you inherit a large sum of money that boosts the overall value of your estate — particularly if it leads to your estate exceeding the threshold for federal or state estate taxes.

An adjustment in the vision of your legacy

Your plan likely reflects your original vision for your legacy. But that vision can change over time. You may want to change how much money you leave to your heirs versus your favorite charities (and what you count as your favorite charities may change as well). Regularly reviewing your estate plan can help keep it aligned with your evolving wishes.

Shifting needs of your beneficiaries

Just as you continue to change and grow, so too will your heirs. You may need to make adjustments to your plan as your children grow up, including loosening limitations on the assets you leave them or perhaps tightening those limitations if you develop concerns about their ability to manage their own finances.

Changes in tax law

New legislation and tax changes can have a major impact on your estate plan. Review your plan every few years to make sure it accounts for any recent changes in the law, such as the updates to federal estate tax exemptions or new regulations around inherited IRAs that took place recently.

In the absence of these scenarios or other major life events, you should review your estate plan every three to five years. That way you can make sure your plans continue to reflect your current needs and wishes.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Neither State Farm nor its agents provide tax or legal advice.





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