This weekend, my brother’s long term girlfriend changed her Facebook status to Engaged.
I am super happy for her and my brother.
And I thought I had an article topic when I spoke to my dad about it and he reported my stepmother’s reaction.
“You know, our number of grandchildren just doubled.”
And that’s true. Last Christmas, my parents had 3 grandkids and one on the way. Now, they effectively have 8, as my new nephew arrived in April and my brother’s
girlfriend fiance is the proud mom of 4 fine young men. Soon we will officially become a much larger extended family.
My Christmas list just got bigger.
My family has had a lot of life happens this year, more than I can or care to go into.
Not every family expands by 6 members in a given year, but changes happen all the time. Couples marry or separate. Babies are born or adopted, and kids grow up. People pass on or become incapacitated.
Other things happen too. People get, change, or lose jobs. People start careers or retire. They move to new cities or states or countries.
Life happens. Things change. You want to make sure that you keep on top of the changes so that if something happens to you, you get the outcomes you want both for yourself and your family.
Wills might need to change for a number of reasons, the biggest being adding or subtracting family members as beneficiaries. If you get married or divorced, knowing you need to change your will is pretty straightforward. Same if you have a new child, unless you’ve set up wording to split your estate evenly among any children.
There are other reasons you may need to change it, though.
Have you bought or sold any significant assets? If you just bought a beach house, you might not want your heirs fighting over who gets it. But it doesn’t have to be that big…families fight over who gets rugs, jewelry, cars, and all kinds of crazy things. And what if you’ve sold the gun collection that your will said went to Cousin Bubba?
Even if your will names all the appropriate beneficiaries, you may have other things to change. Maybe you designated your best friend Sue to be your child’s guardian should anything happen to you, but last year Sue moved to Brazil. Or maybe your designated executor entered a nursing home last year, or is battling a fatal disease.
You need to make sure that all of the people you have asked to take on responsibilities when you first set up your will are still willing and able to take that responsibility and that you still trust that they can and will do them without it being an undue burden.
Be realistic. If you fear that the person you have designated won’t be able to take on the responsibility, you need to change the designation or name an alternate.
And if you move to a new state, you may need to adjust your will to fit the new laws that now govern it.
Planning for Your Incapacity
If you have set up a Medical Power of Attorney or Durable Power of Attorney so that someone can make decisions for you should you be unable to make them, then it’s important that the person you’ve designated to do that can still take on that responsibility.
A Medical Power of Attorney lets someone you designate handle health care decisions if you can’t. A Durable Power of Attorney allows someone to manage your finances and assets if you are incapacitated.
While not everyone has these, they are a good idea to set up, particularly if your health is questionable.
Once you’ve set them up, your main concern will be to make sure that the people you’ve designated to take care of you and your affairs can take on the responsibility if they need to do so.
That takes a lot of trust, both in their decision making abilities and in the quality of their decisions.
If you have designated someone whose own fitness is in question, for whatever reason, change the designation to someone else.
Once you set up your retirement accounts at work, it’s really easy to let them go on autopilot. Part of the point is that they are automatic, right? They come right out of your paycheck.
But…is your beneficiary designation up to date? If you’ve gotten married, divorced, or had a child, you probably need to adjust your plan paperwork along with your will.
And, while this is more retirement planning than estate planning, you may want to look at increasing your retirement plan balance as well. If you get a big raise or promotion and aren’t maxing out your account already, you also have a great opportunity to contribute more money…but only if you take it. You’re used to living on less, so contributing more will be a lot easier than when you get used to having that extra money in your account.
As you get older and closer to retirement, you may need to adjust your contribution whether you get a raise or not. Don’t let Father Time sneak up on you with a low retirement account balance and a 5% or 10% contribution.
Unless your invested in a target date fund, getting older may also mean that you need to examine and rebalance your retirement plan investments so that your risks better suit your situation.
Life insurance is another item you need to adjust as your life happens, particularly as the number of people in your household changes. Getting married, having new kids, watching kids go out on their own all should prompt you to evaluate your beneficiaries, contingent beneficiaries and coverage levels.
But coverage amounts may need to change for other reasons, too. For instance, if you move into a bigger house with a correspondingly bigger mortgage, you may want to increase coverage so that your family can stay in their home should anything happen to you. And if you’ve paid off your mortgage, you may need a lot less.
And since a lot of people have insurance through their job, employment changes should prompt some analysis too. You need to make sure the coverage you have fits your needs, not just what is convenient to set up through work.
Another good reason to review your life insurance it that your health changed (especially if you lost some weight.) You may now qualify for lower premiums if you are substantially healthier than you were when you first got the policy. You also need to talk to your agent about that premium if you stop smoking.
Your life is not static, and your estate and retirement plans shouldn’t be either. You need to make sure that you adjust your will, insurance policy, and other things so that your family can move on from any tragedy with the least amount of stress possible.
That means reacting to changes in a timely manner. That said, we know from dozens of murder mysteries that people don’t actually make the changes they need to make (though that doesn’t usually lead to homicide.)
It’s one thing to know you need to take care of some things, and quite another to actually do something about it. So as your life happens, you have two choices in how to best react.
Some people work best on a deadline. If this rings true for you, set a reasonable deadline to adjust to each life change. That may be a month, it may be 2 or 3, but say that by a certain date, you will review all of the changes you need to make and get them done.
Others work better in a routine. For those, it’s probably best to review all your plans periodically. You may want to do a quick glance through on an annual basis, and perhaps even get professional help every 5 years or so to make sure your plans will accomplish what you want them to.
Whichever method works better for you, make sure you adjust your plans to meet your life now and your life in the future, not your past. Review and adjust, because life happens.
Is your estate plan and retirement plan up to date? How often have you reviewed them? What things have prompted you to make adjustments?