Do you have a Last Will and Testament? Excellent! It is an essential part of your estate plan, and will make things clearer and easier for those you leave behind. “I’m not rich, I don’t have an estate, so I don’t need a will,” you might think. An “estate” in this situation is considered as, “a person’s belongings, physical and intangible assets, land and real estate, investments, collectibles, and furnishings.” You don’t need to be a bazillionaire to have an estate.
Your will does need updating from time to time. Estate lawyers recommend updating your will every three to five years, or any time you have a major life event. Read on for situations when you should update your will.
1. You have a child.
The birth of a first child is usually when people initially create their first will. You should name the guardian(s) of your child, along with the trustee(s) to oversee the child’s trust. You should then update your will with any subsequent children.
2. You have a change in marital status.
When you marry, divorce, re-marry, or have a life partner or common law spouse, your will should reflect this change. Same goes if your partner dies (with this situation, make sure you also update your financial and medical powers of attorney).
3. You’ve moved.
When you sell your home or buy another, your will should reflect this address change. If you move to a different state, check that the laws in your new place don’t invalidate portions of your will (e.g., states have different numbers of witnesses required for will-signing).
4. You have a substantial addition to or subtraction from your estate.
A large addition to your estate—such as the purchase or inheritance of a home, a business, a yacht, a collectible, a stock portfolio—should be considered an event for an updating of your will. By the same token, also update your will if there’s been a large subtraction from your estate.
5. Your child gets married or divorced.
You should consider if and how you would adjust your will when your child marries or divorces.
6. You have grandchildren.
Think about how you want to distribute assets among your beneficiaries. As each grandchild turns 18, you should consider if you will make them their own beneficiary.
7. One child has become your primary caregiver.
If one of your children has spent a considerable amount of time and money caring for you these past few years, you may wish to update your will to show your gratitude or to compensate them.
8. A beneficiary develops substance abuse or financial hardship issues.
When you have a beneficiary dealing with substance abuse or creditor problems, you may want to update your will to include trusts which allow a third party to only distribute funds under the correct circumstances.
9. Your executors or beneficiaries pass away or become incapacitated.
You may need to update your will to include contingency plans, such as naming a co-executor and leaving undistributed funds to the deceased person’s children, to another beneficiary altogether, or to a specified charity.
10. There is a change in estate and inheritance laws where you live.
Your estate lawyer should inform you on federal or state laws that affect your estate planning. Laws on things such as tax cuts, marital situations, transfer-on-death laws, and family business succession may mean you need to update your will.
Our lives change as the years go by, whether it’s locations, relationships, health, or finances. Your will should be updated periodically to reflect these changes, so your family remains protected, and your final wishes are respected.
One last thing: Be sure to tell your loved ones exactly where your will is located! It may be a binder or a thick envelope—either way, let them know where to find it in your home.