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IS IT TIME TO UPDATE YOUR WILL ?
Preparing a will is the best way to be certain your property is
distributed according to your wishes, but keeping that will
up-to-date is essential. You should review your will periodically,
especially when there are changes to a personal
circumstances, your financial situation, or the tax laws.
Here are some situations that should trigger an
immediate review of your will:
Marriage, Divorce, or Remarriage: These life events can
have a major impact on financial planning documents. For
example, if a window or widower remarries, it is important that
the will is updated to show how the children from the previous
marriage and the new spouse should be provided for.
A New Heir. Updating a will is especially important when you
have a child, because your will allows you to name a guardian
to care for your child in the event that something happens to
both you and your spouse. If you don't name a guardian for
your child, the courts will appoint one.
Death of Someone Named in the Will. The death of a
named executor, guardian, beneficiary, or trustee signals a
need to make changes to those provisions in your will.
Substantial Increase of Decrease in Net Worth. If you get
a large personal injury settlement, or receive a large
inheritance or other unexpected windfall, additional tax
planning might be necessary to minimize the tax bill on our
estate. On the other hand, a significant decline in your
financial assets might dictate altering your specific bequests or
making other modifications.
Relocation to Another State. If you relocate, you should
have an attorney in the state of your residence review you will.
This is especially important if you move to or from a community
property state. Although all states recognize a will that was
properly created in another state, there may be nuances that
need to be addressed.
Tax Law Changes: Updating your will allows you to take
advantage of recent developments and new techniques in
estate planning. With the estate tax exemption scheduled to
change a number of times between now and 2011, and the
prospect of future changes, it's more important than ever to
review your will on a regular basis.
Changes to your Intentions. Whether you want to add a
new beneficiary or charitable donation, or you've had second
thoughts about your executive or the guardian of your
children, be sure to implement these changes on a timely
basis. If your revised intentions do not make it into print, they
will have no legal effect.
How to change your will. You can't just make changes on
your will. While every change doesn't necessitate redrafting,
marking your will up invalidates it completely. In the past
changes were made by creating an amendment called a
"codicil," which, to be valid, has to be signed and witnessed
like a will. A codicil supplements your will and can modify,
further explain, or add to, delete, or amend provisions in the
existing document. However, in the age of word processing, it
is much better to redraft, sign, and witness a new will.
Keep it safe and current. Once you have signed your will,
keep it in a safe place, such as a safe deposit box, and be
sure that your family members know where to find it. You
should keep a duplicate unsigned copy handy and review it
periodically to see if any changes are needed.
Reviewing your will is an important part of the estate planning
process, and a process that will ensure that it is in alignment
with your financial and estate planning objectives.
Santos Associates, FEDERALLY AUTHORIZED TAX
PRACTITIONERS, can help you with your accounting, tax
and financial planning needs. Call today for an appointment &
consultation. We are not attorneys, we can refer competent council
upon request.
