Life is full of unexpected changes, and your estate plan should reflect your current circumstances and wishes. Major life events such as marriage, divorce, the birth of a child, or moving to a new state are critical moments to revisit and potentially update your estate plan. Here’s a guide on when and how to update your estate plan after significant life changes in Michigan.
- Marriage or Divorce
When you get married, your spouse typically becomes a primary beneficiary, which may involve adding them to your will or trust. On the flip side, if you get divorced, it’s essential to remove your ex-spouse from your estate plan to ensure they do not inherit your assets unintentionally.
Automatic Revocation After Divorce: Under Michigan law, divorce automatically revokes any provisions in a will that benefit the ex-spouse. This revocation extends to:
- Gifts or property left to the ex-spouse.
- Appointments of the ex-spouse in fiduciary roles like executor or trustee.
- Nominations of the ex-spouse as a guardian or conservator.
- Any powers of appointment conferred on the ex-spouse.
This also applies to the ex-spouse’s relatives named in the will. However, this automatic revocation only affects documents signed before the divorce. If you create a new will or other governing instruments after the divorce, those would still be valid even if they include your ex-spouse.
While Michigan law provides this automatic revocation, it’s crucial to update your estate planning documents after a divorce to avoid potential confusion, ensure your current wishes are clearly expressed, and designate new beneficiaries and fiduciaries. Exceptions to this revocation include divorce decrees that specify otherwise, contracts related to the division of marital property that state differently, or governing instruments explicitly stating that the provision should survive the divorce.
- Birth or Adoption of a Child
The birth or adoption of a child is a joyous occasion that also brings new responsibilities. One of the first things you should do is update your estate plan to include your new child as a beneficiary. You may also want to consider setting up a trust for your child to manage their inheritance until they reach an appropriate age.
Additionally, if something happens to you, you’ll want to ensure that a trusted individual is named as the guardian for your minor child. This decision is often included in your will, and updating it promptly ensures your child will be cared for by someone you trust if the unexpected happens.
- Death of a Beneficiary or Personal Representative
If someone named in your estate plan passes away, whether they were a beneficiary, executor, or trustee, you’ll need to update your documents. This could involve appointing a new personal representative or trustee to manage your estate, selecting a new trustee to oversee any trusts, or naming new beneficiaries to receive your assets.
It’s also wise to review any contingent beneficiaries or alternate executors you may have listed to ensure they are still appropriate choices. Keeping these roles up to date is crucial for ensuring your estate is handled according to your wishes and that your assets are distributed as you intended.
- Changes in Financial Situation
Significant changes in your financial situation—whether it’s an increase in wealth through inheritance, business success, or the acquisition of valuable assets, or a decrease due to loss or financial hardship—should prompt a review of your estate plan.
If you’ve acquired significant assets, such as real estate, businesses, or investments, you may need to consider how these will be distributed among your beneficiaries or protected from estate taxes. Conversely, if your financial situation has declined, you may need to adjust your estate plan to reflect your current assets, ensuring that your beneficiaries receive a fair and realistic inheritance.
Estate planning strategies like creating or revising trusts, updating beneficiary designations, or even reconsidering the distribution of your assets can help you align your plan with your current financial reality.
- Moving to a New State
If you move to Michigan from another state, it’s crucial to review your estate plan. Different states have different laws regarding estate planning, probate, and taxes, and what worked in your previous state may not be valid or optimal in Michigan.
For instance, Michigan’s laws on probate, property ownership, and even healthcare directives might differ from your previous state’s regulations. Consulting with a Michigan estate planning attorney can help you ensure your documents comply with state laws and that your estate plan reflects your new residency.
Why Regular Updates Are Important
Regularly updating your estate plan, even in the absence of major life changes, ensures that your wishes are always current and legally binding. An outdated estate plan can lead to unintended consequences, such as the wrong individuals inheriting your assets, unnecessary taxes, or lengthy probate processes.
Reviewing your estate plan every few years or after any significant life event can prevent these issues and give you peace of mind knowing that your loved ones will be taken care of according to your wishes.
Have You Experienced a Major Life Change?
It’s time to update your estate plan. Contact John R. Dresser at Dresser Law PLLC in Sturgis, MI, to ensure your plan reflects your current wishes. Call (269) 689-8527 today to schedule an appointment.