We generally advise clients to review their estate plan every few years and after any major life changes. This doesn't mean you should review only your Will. A comprehensive estate plan may include a Will, a Revocable Living Trust, a Durable Power of Attorney, a Healthcare Power of Attorney, and a Directive to Physicians. Some estates include additional documents such as life insurance, retirement plans, and business plans. All of these documents should be reviewed periodically to see whether your intentions have changed or if other factors necessitate revisions to your estate plan.
COMMON REASONS TO CHANGE YOUR ESTATE PLANNING DOCUMENTS. Whether to revise an estate plan requires some serious thought on your part. Some common reasons to change your estate planning documents include any of the following:
* Is there a new marriage? If so, you will want to ensure that your estate includes your new spouse and doesn't include your old one. You also need to help ensure that your children from a former marriage are properly provided for, either in your will or in a Living Trust.
* Have you changed your mind about the guardian you chose for your children? If so, you may want to revise your Will or your Power of Attorney for Minor Children's Healthcare. You also should consider adding a successor guardian in the event the guardian you chose is incapable of becoming the guardian of your children.
* Is there a new baby or an adopted child? Make sure your estate plan includes all children—including biological and adopted children.
* Do you want to disinherit a child? If you've decided to disinherit a child, make sure that is part of your estate plan.
* Do you want to add or change beneficiaries, including a charity? Without updating your estate plan, a new beneficiary won't be added if you haven't included that person or charity. Likewise, if you want to remove a beneficiary, you will want to revisit your estate plan and check with your lawyer.
* Have you divorced since your estate plan was made? Change your documents as soon as possible.
* Do you have a blended family? If you want to provide for stepchildren and you haven't already done so, you should revise your estate documents. Stepchildren are not included as heirs if you die without a Will or if your Will fails to name them.
* Has one or more of your beneficiaries predeceased you? If a beneficiary has died, it is important to revise your documents either to provide for new beneficiaries or to redistribute your property among beneficiaries.
* Do any of your beneficiaries have special needs that you want your estate plan to address? If any of your beneficiaries has special needs or has developed a serious illness you may want to provide for the care of that beneficiary.
* Have you moved to a new state? Each state's laws are different, so you may want to review your estate plan with a lawyer in your new location.
* Do you want a new Trustee for your Trust? If you're considering substituting Trustees or adding a successor Trustee to your Revocable Living Trust, it may be wise to review your entire estate plan.
* Have you received an inheritance or additional assets? The addition of new assets is a good reason for revisiting your estate plan. Some or all of the assets may be better off in a Trust, rather than a Will, to avoid probate. Discuss this with your lawyer or financial planner.
* Do you want a new person to have power of attorney? If you have a Durable Power of Attorney or a Healthcare Power of Attorney, or both, it is a good idea to ensure they reflect your current intentions. If not, you can revoke either or both of them and then appoint a new person to have power of attorney.
* Do you have a Directive to Physicians (commonly called a "Living Will")? Are the directives in the Living Will what you want, or have you changed your mind?
* Did you open a business or do you currently own one? You may want to discuss a business succession plan with your lawyer so the business can stay open. You also will be allowed to decide who you want to run your business.
* Are there new tax laws in place? Tax laws are always changing. Discuss this with your lawyer and the effect of new tax laws on your estate plan.
* The mere passage of time is sufficient to warrant a review your estate plan. Even if nothing has changed, it's a good idea to review your estate plan if it's been at least three to five years since you last reviewed it.
WHY IT'S IMPORTANT TO UPDATE YOUR ESTATE PLAN. There are numerous reasons to amend a will or a Living Trust along with your other estate documents. You may have changed your mind about something such as beneficiaries, division of assets, or who you want to have your power of attorney since you last looked at your estate plan. You may have inherited or purchased a significant number of assets since your estate plan was made, or you may have neglected to put some property into your Revocable Living Trust. All of these are valid reasons for reviewing your estate plan.
Discussing your estate plan with your lawyer is crucial when you have significant life changes. Without revisiting your estate plan, your property could end up with beneficiaries you no longer want or your children could end up with guardians you don't speak with anymore. You also may have grandchildren you want to add to your estate plan.
If you have had even one of the above changes happen in your life, it's time to revisit your estate plan so that your current intentions will be carried out. While people tend to put this off, it's important to have your estate plan reviewed right away. Hopefully, these documents won't be needed for a long time, but knowing they're in place can bring you great peace of mind. Give us a call at 253.858.5434 to find out how we can help.