Major life events that could affect estate planning goals

ABCs of estate planning: In a nutshell, estate planning requires the preservation, management and distribution of assets after a person’s death or incapacity due to ill health. Such assets may include homes, jewellery, cars, pensions, insurance policies, stock holdings, personal artwork collections and any other valuable asset.

One of the most sought-after routes to estate planning is writing a will or creating a trust. People make estate plans for a variety of reasons: to preserve their family’s assets, make sure their dependents are looked after, or leave behind a philanthropic legacy, etc. Estate planning is not just reserved for high net worth individuals (HNIs) or ultras. High-Net Worth Individuals (UHNIs). A good estate plan will ensure that the assets of an individual are distributed among the eligible beneficiaries and without any family conflict. Here, we throw light on the major life events that call for a change in an estate plan.

Marriage or separation: One of the major tasks during estate planning is naming beneficiaries for bank accounts, insurance policies, wills and other such important assets. In the event of a marriage or divorce, the list of these beneficiaries is most likely to change. For example, if a person gets married, they most likely want their spouse’s name to be included in their estate. And in case of second marriage, the name of the new spouse has to be included. In addition, a person will want to make sure that the children from their first marriage are accounted for; This may also apply to an ex-spouse to a certain extent, if the split was amicable.

Children: Having a child means a significant re-evaluation of life’s priorities. There may be different scenarios within this category, depending on whether the child/s in question is biological, adopted, foster or step-child. Each of these situations needs to be included in the estate plan. For example, while an adopted child is a legal heir by law, a stepchild, no matter how loved, would need to be officially named as a beneficiary in an individual’s estate plan.

Personal wealth: This is especially important for HNIs and UHNIs with exceptional assets, who have the potential to become unicorns in successful startups and young companies. For them, estate planning can help reduce the impact of gift and estate taxes and shield assets from creditors during a person’s lifetime. It can help extend this protection to selected beneficiaries and protect their inheritance from creditors and mismanagement after the death of a gift giver.

Medical Emergency: Medical or health emergency can affect anyone at any time. Therefore, in the case of a serious health diagnosis or prolonged illness, a person should review estate planning documents and assess who they wish to delegate responsibility for their financial and medical decisions in case of loss or disability of mental abilities. . Future. Such documents should also be kept on record and shared with financial institutions as proof of the will of an individual.

Death: This sadly means you can outrun an intended beneficiary, heir, healthcare proxy or guardian named in your estate planning documents. Therefore, it is important to keep reviewing and updating your estate plans to reflect the latest developments and to remove names in the event of the death of the beneficiary.

Residential Status: Change in residential status is also an important factor that can affect an individual’s estate planning as it involves changes in tax status and many other financial compliance rules and regulations. Therefore, in the event of permanently relocating to another country or a change in nationality status, an estate plan should be reviewed and updated to reflect all changes.

Not having an estate plan could mean that your hard earned money and assets could go into the wrong hands, leaving your loved ones in a difficult position.

Sripriya is the Director and Chief Operating Officer of NS Entrust Family Office