NEWPORT BEACH, Calif., Oct. 13 /PRNewswire/ -- October 19th-25th marks National Estate Planning Awareness Week in the United States. The observance seeks to educate Americans on the importance of having proper and updated estate planning documents should death or incapacity suddenly occur.
Estate planning is one of the most overlooked areas of personal financial management. According to the National Association of Estate Planners and Counselors, it is estimated that over 120,000,000 Americans do not have up-to-date estate plans to protect themselves or their families in the event of sickness, accidents, or untimely death.
Yet the most shocking statistic, according to OC estate planning lawyer, Darlynn Morgan, is how many Americans believe estate planning is something you do once and never look at again until a person's death or incapacity. That, according to Morgan is the reason up to 95% of estate plans will fail when families need them the most.
"Contrary to popular belief, estate planning is not something you do once and then stick in a drawer never to look at again," says Morgan. "Instead, your plan has to be updated as your life, and the law changes through the years," she adds.
So what life changes warrant an update to an estate plan? Morgan recommends the following:
- Marriage, Remarriage or Divorce- "We've all seen the consequences of not updating a plan in high profile estate battles such as Gary Coleman's or Anna Nicole Smith's," says Morgan. Morgan warns that failure to update your estate plan to reflect such changes in marital status could cause an ex-spouse, unintended third party or children from a previous marriage to end up with your inheritance if the unthinkable happens.
- Birth of a Child- According to Morgan, your estate plan should always be updated following the birth of a child to ensure they are not disinherited under your current plan. Morgan states that the birth of a child is also a great time to legally name guardians to care for your child should something unexpectedly happen to you.
- A child becomes handicapped or diagnosed with special needs- According to Morgan, an estate plan must also be updated upon the discovery that a child is disabled because leaving money outright to such a child can jeopardize their ability to qualify for Medicaid or other benefits in the future. The parent is recommended to change their plan and leave everything to a trust should something happen to them.
- You enter a same-sex relationship with property or children in common- Morgan always advises those in same-sex or non-traditional relationships to review and update their plan often to ensure partners and children stay protected physically and financially should death or incapacity suddenly occur.
"As a rule of thumb, I always advise clients to pull their plan out of the drawer every 2-3 years to make sure everything is exactly how they want it to be if something happens to them," says Morgan. "I would ask myself questions like, 'Am I still happy with the guardians I named for my kids? Is my ex-spouse still entitled to receive half of everything I own if something happens to me?' These are all important questions that could cost your family thousands of dollars and years of headaches if not caught in time," she adds.
For more information on Orange County estate planning attorney Darlynn Morgan, please visit http://www.morganlawgroup.com or call (949) 260-1400.
SOURCE Darlynn Morgan