Life changes often necessitate updates to your estate plan, particularly after a job change or a salary increase. Adjusting your estate planning documents ensures that your assets, beneficiaries, and legal protections align with your current financial situation and future goals.
Act promptly to protect your family and assets. Contact us through our online contact form or call (608) 292-5185 today.
Why Your Estate Plan Should Change With Your Career
When you experience a job change or salary increase, the structure of your estate plan may no longer reflect your circumstances. Estate planning encompasses more than just having a will; it also involves trusts, powers of attorney, healthcare directives, and asset protection. Revisiting your estate plan ensures it aligns with your current income, assets, and family needs.
Key reasons to review your estate plan include:
- Changes in income or assets: A higher salary, bonuses, or new investments may affect tax strategies and asset distribution.
- New employment benefits: Life insurance, retirement accounts, and stock options may need to be integrated into your estate plan.
- Altered personal circumstances: Marriage, divorce, or the birth of children can affect your designated beneficiaries.
Updating Your Beneficiaries
One of the simplest yet most critical updates is reviewing beneficiary designations on retirement accounts, insurance policies, and other financial assets. These designations override the instructions in your will, so outdated information can create conflicts.
- Ensure all accounts reflect your current intentions.
- Update forms for life insurance, 401(k), IRA, and other retirement accounts.
- Coordinate changes with your overall estate plan to prevent inconsistencies.
After updating beneficiaries, review your will and any trusts to confirm they align with these changes.
Revising Wills and Trusts
Your will and any trusts should reflect changes in your financial situation or family dynamics. For example, a new job might allow you to contribute more to a trust or adjust the distribution of your estate. Consider the following:
- Amend your will to accommodate new assets or changed relationships.
- Update revocable or irrevocable trusts to reflect your current intentions.
- Reassess who should serve as executor, trustee, or guardian if personal circumstances have changed.
By aligning these documents with your updated financial picture, you can reduce the risk of disputes and ensure your wishes are followed.
Powers of Attorney and Healthcare Directives
Changes in employment or income may also necessitate reviewing powers of attorney and healthcare directives. These documents designate who can make financial or medical decisions if you’re unable to do so. Updating these ensures your agents are still appropriate and capable.
Tax Considerations and Estate Planning
A job change or raise can impact your tax obligations and estate planning strategies. Higher income may introduce new considerations for estate taxes, charitable giving, or retirement contributions. Discussing these changes with your Madison estate planning attorney ensures your plan remains tax-efficient.
Key Steps to Take After a Job Change or Pay Raise
When adjusting your estate plan, consider taking these steps:
- List new assets and income sources.
- Review all beneficiary designations and update them if needed.
- Revisit wills, trusts, and powers of attorney to ensure consistency.
- Assess tax implications and revise your estate plan accordingly.
- Consult with a Madison estate planning attorney to confirm all changes are legally sound.
Following these steps helps maintain an estate plan that accurately reflects your current financial and family situation.
Common Mistakes to Avoid
Even small oversights can create significant issues later. Avoid these common mistakes:
- Ignoring minor asset increases or new benefits.
- Failing to update beneficiaries promptly.
- Overlooking the impact of tax law changes on your estate.
- Neglecting healthcare directives or powers of attorney after life changes.
Regular reviews help prevent these issues and keep your estate plan current.
How Often Should You Review Your Estate Plan?
Estate plans should be reviewed every 3–5 years, or whenever a major life event occurs, such as:
- Job change or pay raise
- Marriage, divorce, or birth of a child
- Significant increase or decrease in assets
- Changes in state or federal tax laws
Consistent reviews ensure your plan remains relevant and effective.
Updating Your Estate Plan With a Madison Estate Planning Attorney
Reviewing and updating your estate plan after a job change or pay raise ensures your assets and loved ones are protected according to your current circumstances. By coordinating changes in beneficiaries, wills, trusts, and legal directives, you maintain control and reduce potential conflicts.
Contact Estate Law Partners, LLC through our online contact form or call (608) 292-5185 to discuss updates to your estate plan and safeguard your family’s future.
