Should I Update My Will?

I often have clients asking me if they should update their Wills.  If I don’t know my clients’ specific circumstances, I usually respond with the typical attorney response of “It depends.”

As a rule of thumb, always review your Estate Plan (wills, powers of attorney, health care proxy and HIPAA authorization, guardianship of minors, trusts) every five years or whenever you have a significant life event happen such as death of a spouse, divorce, marriage, beneficiary with special needs or addiction issues, accumulation of income, or inheritance.

Here are some scenarios where an Estate Plan is very likely in need of an update:

1 – Change in Marital Status.  Whether widowed, divorced or newly married, take a look at who your named beneficiaries, health care agents, attorney-in-fact, and successor trustees are.

2 – Trust Funding.  You may have set up a trust to avoid probate.  But did you actually fund the trust?

3 – Beneficiary Designations.  I am constantly asking my clients about beneficiary designations on their bank accounts, IRAs, 401(k)s, TSPs, investment accounts and life insurance policies.  Why?  The reason is two-fold: First, you may have set up beneficiary designations that are no longer relevant.  For example, in trust for a minor child who is now a financially responsible adult.  And second, it is extremely important to not only name “primary” beneficiaries, but to name “contingent” beneficiaries as well.

4 – Your children are no longer minors.  Parents often want to change their Estate Plan documents to name their adult child(ren) to be successor healthcare or financial agents or trustees instead of the persons they named when their children were minors.

5 – Purchased a second or vacation home.  Clients may want to consider putting their vacation home in a trust or rental property in an LLC.

6 – Moved to a new state.  Clients may want to ensure that their estate planning documents comply with the laws of their new state.  They may just need to retitle their home into their trust.  Clients should also be aware of their new state’s estate tax laws and whether or not their current estate plan is effective from an estate/inheritance/gift tax perspective.

7 – Acquired or Started a Business.  Clients should think about what they want to happen to their business if they still own it when they die.  Have your child(ren) continue the business? Sell the business?  Or if you’re in business with others, is there a buy/sell agreement in place?

8 – Change in Financial Status.  Whether the change is good or bad, clients should consider whether their current Estate Plan fits their new circumstances.

Outdated Estate Plans not only jeopardize clients’ wishes, but they can also have unintended consequences such as:

  • Disqualifying a special needs beneficiary from receiving governmental benefits.
  • Adverse income and/or estate tax consequences.
  • Disinheriting beneficiaries or including unintended beneficiaries.
  • Increased time, costs and fees associated with settling an estate (i.e., probate).
  • Creating probate battles between beneficiaries and other loved ones.
About Lauren Caisse

Lauren Caisse was admitted to practice in both Massachusetts and Rhode Island in 2004.