Preparing a will is one of the best ways to be certain that upon your death your property will be distributed according to your wishes. What many people don’t realize, however, is that keeping your will up to date is as important as having a will. That’s why you should review your will periodically. As long as you have testamentary capacity (i.e. you’re mentally competent), you can make changes to your will. You can change it a little, change it a lot, or completely revoke it, any time you want. However, it is imperative that you work with a qualified estate planning attorney so that your changes are legally valid and will be understood by your executor, the courts, and your beneficiaries.
Beyond simply reviewing your will every five or six years, what events might trigger a need to change your will?
Marriage, divorce, and remarriage
Life events can have a major impact on financial planning documents. For example, if a widow or widower remarries, it is important that the will is updated to show how the children from the previous marriage and the new spouse should be provided for in the will. And a divorce quite often changes a person’s view of who they want to receive their property upon their death.
A new heir
Updating a will is especially important when you have a child, because your will allows you to name a guardian to care for your child in the event that something happens to both you and your spouse. If you don’t name a guardian for your child, the courts will appoint one and it may not be whom you would have selected. If a family member is diagnosed with a condition that might make them a candidate for government assistance programs, a special needs trust might need to be added to a will to prevent bequests from disqualifying that family member from the benefits they are entitled to.
Death of someone named in the will
The death of a named executor, guardian, beneficiary, or trustee signals a need to make changes to those provisions in your will.
Substantial increase/decrease of net worth
If you win the lottery, get a large personal injury settlement, or receive a large inheritance, additional tax planning might be necessary to minimize the tax bill on your estate. On the other hand, a significant decline in your financial assets might dictate altering your specific bequests or making other modifications.
Life relocation to another state
If you relocate, you should have an attorney in the state of your new residence review your will. This is especially important if you move to or from a community property state. Although all states recognize a will that was properly created in another state, there may be some nuances that need to be addressed.
Tax law changes
Updating your will allows you to take advantage of recent developments and new techniques in estate planning. With recent increases in the federal estate tax exemption, the tax planned wills many people did to minimize estate tax may now create needless and serious problems for their estates.
Changes to your intentions
Changing your mind about something in your will should be handled as soon as you’ve decided. From adding a new beneficiary or charitable donation to second thoughts about your executor or the guardian of your children, be sure to make these changes on a timely basis. If your revised intentions do not make it into print, they will have no legal effect. And be sure your memory of what is in the will matches what is really in it. Sometimes our recollection of what is in the will does not match what we actually put in there many years before.