Life Adjustments Call for Updates to Your Will!
As life circumstances change (births, marriages, divorces, and deaths), it may become necessary to make changes to your will. If an estate plan is not kept up-to-date, it can become useless. The best way to make changes is either through a codicil — an amendment to the will — or by creating a new will.
While it may be tempting to just take out a pen and make changes by hand, this is not recommended. Changes will not be effective unless you use the same formalities as you did when drafting the will. And depending on state law, changes made by hand on the will may void the will altogether. If you sign your name to handwritten changes and have the changes witnessed, it is possible a court will find that the changes are valid, but there is no guarantee and there are likely to be delays with the court while your final wishes are sorted out.
If you have small changes to make to your will (i.e., changing your executor or updating a name that has changed) a codicil may be appropriate. The benefit of a codicil is that it is usually cheaper than redoing the entire will. The same rules for wills apply to codicils, which mean the codicil should be dated, signed, and witnessed. Always keep a codicil with the will so your personal representative can find it easily.
If you have significant changes to make to your will (i.e., adding a spouse or removing a beneficiary) or have more than one change, it is generally better to update your will rather than write one or more codicils. The updated will should include a date and a clear statement that all other previous wills and codicils are revoked.
Before you make any changes to your will, call Strohschein Law Group at 630-377-3241 to protect what matters.
When Should You Update Your Estate Plan?
Once you’ve created an estate plan, it is important to keep it up to date. You will need to revisit your plan after certain key life events.
Whether it is your first or a later marriage, you will need to update your estate plan after you get married. A spouse does not automatically become your heir once you get married. Depending on state law, your spouse may get one-third to one-half of your estate, and the rest will go to other relatives. You need a will to spell out how much you wish your spouse to get.
Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that if you leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property.
Even if you don’t have children, there may be family heirlooms or mementos that you want to keep in your family.
Once you have children, it is important to name a guardian for your children in your will. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older.
Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. They will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.
Divorce or Death of a Spouse
If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan — for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.
Increase or Decrease in Assets
One part of estate planning is estate tax planning. When your estate is small, you don’t usually have to worry about estate taxes because only estates over a certain amount, depending on current state and federal law, are subject to estate taxes. As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may want to change your plan to focus on other things.
Other reasons to have your estate plan updated could include:
• You move to another state
• Federal or state estate tax laws have changed
• A guardian, executor, or trustee is no longer able to serve
• You wish to change your beneficiaries
• It has been more than 5 years since the plan has been reviewed by an attorney
• Contact Strohschein Law Group to update your plan