According to a 2004 survey performed for legal publisher LexisNexis, 58% of Americans lack even a basic will. Even more surprising is that 69% do not have any living will or medical directive and a whopping 74% do not have a power of attorney for financial decisions. So, if you have prepared some or all of these documents, congratulations!

However, once you prepare this type of paperwork, you cannot just file it away and never look at it again. In fact, you should review the terms of your estate plan every time you or your family encounters a major life change. One rule of thumb is to review your documents each time you reach a birthday that ends in a zero, i.e., at age 50, at age 60, etc.

Review and Modify!

It is also a good idea to review your documents if there is a death in your family. You should confirm whether the deceased person was named as an agent to manage your affairs. If so, you'll want to verify that your documents list alternates to take the place of the deceased person. Also, you may choose to modify your estate to pass the deceased's inheritance to his children, or to other heirs in his place.

Protect Your Assets

Similarly, if there is a divorce, either yours or your child’s, you want to make sure that you have not named someone to handle your affairs who is no longer a member of your family. Naturally, if you are divorced, you will need to change the assets passing to your former spouse. But even if it is your child who has divorced, it might be time to change the amount of the inheritance you give to that child or to the grandchildren from that family. (If you are concerned about an impending divorce involving a child, your estate plan may be revised to prevent an in-law from sharing in the assets passing to your child upon your death).

If there is a disability, a medical diagnosis or a decline in health, it would also be a good time to review your documents. It may be your last chance to change your own documents while you are still legally able to do so.

Get Peace of Mind

If your child is experiencing a medical problem, it may be advisable to set up a trust to have assets managed for that disabled child or to name alternate heirs in the event that he predeceases you. While none of these scenarios are pleasant to think about, the reason you prepared your estate plan was to help ensure a smooth transition when you could no longer handle your own affairs. That goal might not be achieved if you “outgrow” your estate plan and never update it.

Avoid the Top Ten Estate Planning Mistakes!

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