Top Five Reasons to Update Your Will
When should you update your Will? A Will should be updated when your personal circumstances change, which could be after one month or ten years. The mere passage of time is not a reason to change your Will. Your Will is like your home. If properly maintained, your home will last a very long time. Likewise, if properly updated, your Will can also last a very long time.
The most common reasons for updating your Will include: changes in family, wealth, health, state residence, and tax laws. You should take time to periodically consider each of the update reasons at least once a year. That certainly does not mean that you should update your Will every year. However, an annual checkup will ensure that you monitor the update triggers.
Reason #1: Change in Family
The most common reason for updating a Will is a change in family. Your family could add new members by birth (e.g., children or grandchildren) or lose family members by death. It is important that your Will accurately reflects the actual people that survive you. You certainly don’t want to forget the new baby and you don’t want to make things more complicated by leaving an inheritance to someone that has already passed.
In addition to making sure that you have an updated group of beneficiaries, changes in family circumstances is also likely to impact your previous selections for fiduciaries (e.g., executor, guardian for minors, power of attorney, etc.) that may become unable unwilling or unable to effectively serve. Additionally, your relationship with a beneficiary or a fiduciary may sour over time and that issue would also need to be addressed. Further, at the time of your initial Will, your children may not have been mature enough to serve as back-up fiduciaries. As they mature, many people replace their initial selections with fiduciaries that will likely outlive them.
Reason #2: Change in Wealth
When a client’s wealth changes drastically, the client would benefit from reevaluating the existing Will to reconsider the size or percentage of inheritances. A change in wealth may also lead to tax or charitable issues that were not previously considered based on the previous wealth circumstances.
Reason #3: Change in Health
As a client’s health changes for the better or worse, it is critical that we review the existing Will to ensure that the Will remains optimal. Also, you must consider the health of your fiduciaries (e.g., executor, guardian, trustee, agents for power of attorney, etc.). For example, your initial appointee for executor may no longer be the best selection if his/her health has deteriorated.
Reason #4: Change in State Residence
If your Will was validly executed in a first state (e.g., Delaware), then it will likely be valid when you move to a different state (e.g., Pennsylvania). Each state has different laws regarding administering a Will. Often these differences are minor, but sometimes they can drastically impact your planning. For example, states vary regarding the required residence of an executor, inheritance tax laws, and whether a child can be disinherited by omission. Therefore, if your existing estate plan was executed in a different state then your state residence, it would be worthwhile to have a local estate planning attorney review it.
Reason #5: Change in Tax Laws
Even if there are no changes in a client circumstances (e.g., family, wealth, health, & state residence), it is important for a Will to be reviewed for changes in tax and legal strategies. Periodic meetings with your attorney will increase the likelihood that your estate planning documents remain optimal.
If your Will is over five years old, we recommend a professional review because it is likely that one or more life changes could necessitate an update to your Will. Also, your incapacity planning documents (Powers of Attorney and Living Will) should also be updated periodically. Please contact us if you would like to review your existing estate plan.