Most Americans lack any sort of estate plan or will whatsoever, which can be to a huge detriment to their family after death. While the law tries and makes the probate process as simply and straightforward as possible, it can be a distressing experience for a family to deal with the consequences of no end-of-life planning, both financially and emotionally.
But even for those who did their homework and formulated a will, your last will and testament does not have to be the last will you will ever write. When it comes to estate planning, updating your estate plan is incredibly important. Not only can several things happen that might completely change your priorities in life and cause your will to not align at all with your current financial or emotional status, but updating your will is also a way to ensure that nothing is left unaccounted for on your end, in the case of your end.
If you have a last will and testament, consider when and why you may have to update it. Here are six simple times when calling up a lawyer and drafting a new will may be necessary.
Marriage or Divorce
The two biggest times for changing a will are upon a new legal union, and upon the death of an old one. Both marriage and divorce can be a good reason to update your will, either to reflect any decisions made during the divorce proceedings, or to remove your ex-spouse from your will. Alternatively, upon marriage, it’s typically best to define exactly what you plan to pass onto your wife or husband, and what you plan to pass onto your children.
If you marry into a family, and thus gain stepchildren, including them in your will is also quite important. Stepchildren have no automatic legal right to your property unlike biological children, and are not typically considered in laws of intestacy. You can, however, legally adopt your spouse’s children, which solidifies their inheritance even if you do not include them in your will.
Remember that marriage and adopting a stepchild are two separate things. Combining them might be best for a cohesive family, but take note of the commitment attached to dedicating yourself to raising a stepchild into adulthood, and the early difficulties of being a stepparent.
A New (and Serious) Relationship
Not all loving and life-long relationships have to be defined under the legal parameters of a marriage, or even a common law marriage, but understand that without a deliberate effort to include your loved ones in your will, if there are no legally binding familial ties between you, intestate laws will not include them as beneficiaries in your estate. Be sure to designate your new loved one in your will.
An Addition to the Family
While your biological children automatically have a right to inheritance, a will allows you to further finetune what they get, and why. When a baby is born into the family, be sure to update your will to reflect their inclusion in your estate planning. As they get older, it’s important to keep updating your will whenever you decide around what you should or should not pass onto your children.
There are, of course, times when parents may be inclined to punish their children for something they did by disinheriting them. However, it is a complicated process, and not one that is always completely binding. While a parent can omit a child from their will in almost all states, there are limitations to it. Furthermore, there may be better options than disinheriting. For example, you can use a living trust to limit and strictly control the flow of your money to your child after your death, if you’re worried about entitlement or a lack of motivation.
A Loss of Life
An obvious and unfortunate time for changing a will is after a death in the family. You cannot pass on money to someone who isn’t alive, and if your will happens to include a deceased person – or in more extreme cases, if someone survives you but then dies while your will is being executed – then whatever you pass onto them is instead transferred into their estate.
If you want to ensure that your wealth is passed around responsibly and without state interference, be sure to update your will when one of your beneficiaries has passed away.
When Estate Tax Laws Are Changed
The estate tax and the considerations you must make around it are a major part of estate planning. The estate tax is the value deducted by the state from your estate after you pass on. This value has recently been raised from $5.49 million in 2017 to $5.6 million in 2018.
However, the estate tax may be eliminated in the future, depending on politics. The Trump administration has often called for the elimination of the federal estate tax, and the newest tax reform framework issued by the GOP has outlined this elimination, although whether it will go through is another matter.
Deciding New Guardians
One tool that definitively sets the last will and testament apart from a revocable living trust is the document’s power to instate a legal guardian for your minor children upon your death. Through a will, you can specify who will take care of your kids, and even leave them with a certain amount of your estate to help them financially in the task of raising your child or children.
Changing a Will
Changing a will is a relatively straightforward process, with several options. The simplest and least confusing is to sit down with your lawyer or estate planning professional, and draft a new will to replace the old one. The old one can be used as an outline for the new one, with the important inclusion of a statement that invalidates the old will and declares this to be the latest will.
If your will is quite lengthy and redoing it may require an extremely long amount of time and resources dedicated to completely unraveling all its finer details, then it may be best to instead attach a codicil to your will, which is typically enough for minor changes. This is a document added to your will, rather than a separate will.
Finally, if anything you recently acquired is left out of the will upon your death, and if it does not already belong in a trust or has beneficiaries otherwise attached to it by some transfer-on-death documentation, then your state’s intestate laws will take over and your next or nearest kin will be considered the beneficiary for that asset or property. To ensure that your personal wishes are best carried out after you pass on, always make it a point to keep your will updated.