You have just completed what may very well be one of the most important documents for you and your family. Time passes, years go by, your will is safe and sound – but is it still up-to-date?
It is extremely important that your will is updated regularly to avoid any potential confusion and extra stress for your family at a very emotional time for them.
As situations change, so should your will and estate plan. Whether you use your driver’s license renewal date or your birthday, or some other regularly occurring event as a reminder to update your will, ensure it doesn’t become obsolete.
7 reasons to review your will and estate plan
As time passes, situations change, and your will may become invalid, obsolete, or despite your best intentions, cause more confusion when the time comes that your will is read.
New people come into your life
Broadly speaking, if your will was to state that every child is to receive an equal percentage of your assets etc. and you have a child after your will was created, they would still be a beneficiary of your estate, just as they would have been if they were born before your will was created.
However, if you do have more children it is always best practice to take another look at your estate plan to ensure the wording is still correct. You may also marry or re-marry, and grandchildren may be born that you wish to receive a portion of your estate.
A will doesn’t just concern family – there may be other people that come into your life that you wish to transfer assets to. Or people who were previously included in your will may no longer be in your life – relationships with certain friends can deteriorate, or you could lose contact with certain people that previously stood to benefit from your will.
Therefore, it is important to make a formal update to your estate plan to include the new people that play an important part in your life, and to remove others that you lose contact with.
A beneficiary or other key individual dies
If a person that you had named as a beneficiary or ‘executor‘ of your Estate Plan has died and your will still name them, this could cause a great deal of confusion when the time comes for your estate to be distributed.
If the truly unthinkable happens and one of your children passes, don’t assume that the portion of your estate that they were set to receive will be automatically passed on to their children or family.
Clear up any potential confusion and update your will if a person named in your estate passes away before you.
Due to the nature of divorces, many people may not wish for their ex-spouse to receive a portion of their estate as they had once planned.
If your will was created prior to a divorce and you wish to remove your ex from your Estate Plan, it is recommended that you seek the advice of a legal professional as to the changes you require and to limit the chances of an ex’s Will Contest being successful.
Your spouse passes away
Wills should be written in such a way as to always have a backup plan in place. For example, if your husband or wife dies before you, their portion of your estate might go to another family member or another named individual.
If this situation occurs, you may wish to redistribute your assets to other people, so an update to your estate plan is essential if this occurs.
A child comes of age
When a child turns 18 and comes of age, he/she is no longer dependent. Therefore you may need to change your will in any areas that provided additional funds for any dependents.
Change of assets or financial situation
Whether you come into money through inheritance, hard work, or another such route whereby your financial situation changes (for better or for worse) this is a very good time to consider updating your will helps to protect your financial situation.
It may be that after receiving your windfall you wouldn’t pass these assets on to your heirs in the same way you would have done before, as you may wish to give a portion of your estate to another beneficiary or maybe even a charity due to your new financial freedom.
This is also a good time to point out that it is generally better to state financial amounts in percentages rather than as a dollar figure. For example, you may wish that $50,000 go to your eldest child, and the remainder to go to your second eldest.
There typically wouldn’t be a problem with this if your financial situation remained the same as when you wrote your will. Let’s say you had $80,000 available: $50,000 to child A and $30,000 to child B.
However, problems can quickly arise of your financial situation changed for the worse and now there is only $50,000 available. Does child A still get their $50,000 leaving child B with nothing?
Conversely, if your situation changed for the better after your will was written (through inheritance for example) and now there is $150,000 available, does child A still get $50,000 when child B now gets $100,000?
Writing these figures as percentages in this particular situation would be a lot clearer and can help to avoid disputes.
Simply changing your mind
Of course, this is your will and you can change your mind if you so wish.
Perhaps you’d rather a particular asset go to someone other than the original person you specified? Maybe you wish to give to a charity that was of particular importance to you more recently? Remember, you can change your will when you want to.
For the reasons stated above, it is essential that you keep your will up-to-date and relevant.
Despite your best intentions, if your will includes people that are no longer able to be beneficiaries, this could cause a lot of confusion and a level of unneeded stress at a very emotional time for your friends and loved ones.