When should you update your will?
A will is a legal document that specifies how you want your property and assets to be distributed after your death. It has to be updated if there are any major changes in your life. Here are some common reasons to update your will:
A new child
Whether you give birth or adopt, you’ll need to ensure that your child is provided for and has a legal guardian named in your will. In addition, if you want to provide for grandchildren in your will, you can update it each time your family has a new addition.
Changes to your marital status
A wedding, divorce, or the death of a spouse or partner are all reasons to update your will. You may also want to update your durable financial power of attorney and medical power of attorney to make sure someone can make decisions on your behalf if you’re unable to. You should also note that, unlike your own children, any stepchildren you may have are not entitled to any of your property under the law. If you want to include them in your will, you have to specifically add them as beneficiaries.
If you are getting divorced, it is necessary for you to make sure that both spouses have updated wills. If one spouse dies without updating their will, the surviving ex-spouse may still inherit and a new spouse may not receive anything. It’s a good rule of thumb to review your will every four to five years, even if you don’t think anything is different. This helps ensure your family stays protected and your final wishes are respected. If you have children from a previous relationship and remarry, it is best that both parents update their wills so that they can be certain who will take care of their children if something happens to them.
Financial Changes
Sudden increases in your wealth are happy events, but may shift you into a higher tax bracket, creating estate tax considerations. You may also decide to change your beneficiaries, increase the gifts you’re making, or leave a legacy gift to charity. Many people also choose to create living trusts. This allows them to provide for their loved ones and avoid the expense and delay of probate.
There are instances where your wealth may decrease — for example, if you lose money in the stock market or lose your employment and its benefits. As a result, you may decide to change your beneficiaries, or which assets you leave to them.
Changes to the law
Laws associated with taxes and estates can change over time. This may sometimes make other estate planning strategies — like living trusts or transfer-on-death accounts — more attractive.
Moving to a different state
Estate laws vary from state to state. A valid will that you create in one state may be accepted in others. This isn’t always the case, but you can avoid legal repercussions if you review your will every time you move to a new state.
Your health deteriorates
If you’re diagnosed with a degenerative disease or terminal illness, it’s smart to review your will while you’re still feeling well and are able to make decisions. You may also wish to give assets away now, so they’re not counted as part of your estate later.
You change your mind about a beneficiary.
You probably assume that changing your mind about leaving assets to an heir is something that only happens after a big fight. However, people have a change of heart for lots of reasons. Perhaps you have intended to leave part of your estate to a disabled relative, but they no longer need financial help. Or maybe you’ve become involved in a charity and want to contribute some of your estate to support it after your death.
