LAW FIRM BLOG
When To Update A Will and Why
September 22, 2020
Congratulations! You have a will. That’s more than most people have. In fact, 74% of parents with minor children don’t have one.
A will just might be the most important legal document you’ll ever sign. It protects your most important asset—your family. Without one, the courts—not you—decide what happens to your property. They can even decide what happens to your children. Unfortunately, after many of us draft a will, we file it somewhere for safekeeping or leave a copy with our attorney, and then forget about it and don’t look at it again. That can be a big mistake.
Lives change. Our finances change. Loved ones leave us and new family members join us. We relocate. And on and on. These types of occurrences — and many others — require updating a will.
Consider your will a living document that needs regular maintenance to stay in good working order. When your life or circumstances change, the details of your will and other estate planning documents should reflect those changes. After you’ve created them, you’ll most likely need to revisit, review, and re-evaluate them at key points in your life.
While there is no exact date or timeline for when you should update your will, a good rule is this: any time you have what’s considered a “major life event,” you should re-evaluate your will. Life events can include:
•The birth of a child
•Death of anyone related to the will
•Marriage or divorce
•Change in ownership of major property
When attorneys work with estate planning clients to create a will, they attempt to include in the document some flexibility so that it remains valid and relevant for a reasonable period of time. And some wills do pass the test of time. A 30-year-old will can be in force and effective. There are, however, life events that will necessitate an update or change to a will or other estate planning documents. Here are some important reasons to update your will or entire estate plan:
You Marry
Marriage will make any will created beforehand invalid unless the will has been specifically made in anticipation of a particular marriage. You will need to affirmatively include your new spouse in your estate plan. As your new spouse doesn’t automatically become your main heir, you will want to define your spouse’s share of your assets in the event you die. Note that, you cannot disinherit a spouse without his or her consent.
State law does give your spouse rights to your estate if you die intestate (without a will), but the state’s scheme may differ from your plans. Most states’ law grant a spouse one-third or one-half of an estate. If you don’t have any children, your parents or siblings will get the rest. To leave all your property to your spouse, you’ll need to revise your will.
You Cohabitate
If you are cohabitating with someone but are not married and you want your significant other to inherit any of your property, you need a new or revised will.
Birth or Adoption of a Child
Obviously, the big question is how your children will be cared for if both you and your spouse die or become incapacitated. You definitely will need a revised will to name a guardian for your children, and also a property manager to administer their inheritance while they are still minors, and a trustee for any trust created for that child by the will.
But let’s say you have another child after your will was created. In many situations, your will is flexible enough to accommodate possible future children and automatically include those born after it was signed. However, it’s recommended that you review your will and explicitly name a guardian for your new child.
Similarly, the will is generally divided evenly among your children, even if you have another child after your document is signed. However, you will want to verify the language in your will to make sure they are included as if they had been born prior so that all of your children get an even share.
Finally, you may wish to update your will to name your children as secondary beneficiaries after your spouse.
You are Considering Divorce
Understand that your spouse always has marital rights to a “statutory share” of your estate (usually one-third to one-half). If you are married and leave your spouse out of your will because you are separated, and die without completing the divorce proceeding, he or she still has a legal claim on your estate, no matter how long you have been physically apart.
And once you file for divorce you often can’t change your will until the divorce is finalized. Revising the will before you commence the divorce ensures that your spouse will not receive all of your estate if you die before the divorce is complete.
You have Gotten Divorced
Suppose that in your will you leave all or part of your property to your spouse and you get divorced. Under the law in many states, the divorce automatically cancels the bequest to the former spouse. The alternate beneficiary named for that bequest or, if there is none, your residuary beneficiary, gets the property. In some states, however, your former spouse would still be entitled to take your property as directed in the will. In some other states, a divorce revokes the entire will.
Rather than deal with these uncertainties, follow this simple rule: Make sure to update your will as soon as permissible after the divorce so your new beneficiaries are clearly identified.
If you’re lucky, some minor changes may be all that is required, however, in some states, a divorce will automatically revoke all the provisions of your will. In these cases, you will have to draft an entirely new will.
In your will, you will usually want to remove your ex-spouse as a beneficiary or trustee on any living trusts you’ve created. You’ll also revise trusts that control the assets you want to leave for your children. You may also need to change your power of attorney, living will, as well as the beneficiaries on your IRA, pensions, and life insurance.
And you may need to address other issues. If your will names your ex-spouse as executor, who do you now want to serve in that role? Divorce may also change the person you would nominate to serve as guardian of your children. You may even wish to leave some portion of your estate to your ex-spouse, in which case you need to explicitly state that affirmatively in writing.
Your Child gets Married
You may be more cautious about your potential ex-son-in-law and potential ex-daughter-in-law than your child. But your current will likely address issues that applied when your child was much younger, meaning it does not consider your child’s possible divorce. You may be able to mitigate the lack of their prenuptial agreement by creating trusts in your will and including post-nuptial requirements before your child can receive any estate distributions.
Create this will immediately after your child gets married, since (a) the marriage may never happen, and (b) if you do happen to die before the marriage, anything you leave your child is not considered a marital asset in most states.
Your Beneficiary Develops Creditor or Substance Abuse Problems
If a beneficiary becomes addicted to alcohol or prescription drugs, or if the beneficiary develops large creditor problems you should update your will to include trusts that allow a third-party trustee to distribute funds only under the correct circumstances. Create this will as soon as you suspect there is a problem.
Your Young Dependent Child Becomes a Responsible Adult
Another situation you may want to review with regard to your children is after they’ve reached adulthood or at least 18 years of age. You may have an old will written when your kids were young that places all the assets you leave them into a trust. That’s a good plan for young children. But if they’re now grown, possibly with kids of their own, you should consider a new plan.
Since they will no longer require guardians, you may want to change your will and revise certain bequests or even change your will to name them as executors. You may also want to re-allocate who gets what as your children have changed since they were younger.
Your old will likely named your spouse or parent as your first executor, then perhaps your sibling or a friend. Now everyone is decades older (or deceased), and your younger family members have reached adulthood and may be up to the task of administrating your estate affairs more expediently than your past choices.
Tax Laws have Changed since your estate plan was written.
State and federal tax laws that can affect your estate plan are constantly changing, and even more dramatically in the past few years. You need to periodically check to determine whether the Federal or your state government has enacted new laws that impact your will and estate planning documents.
If your will contains provisions to address estate tax issues, and it’s more than five years old, you may need an estate plan tune-up.
For example, many wills have become obsolete because they established trusts meant to avoid estate taxes. While that approach made sense when the exclusion from tax stood at $600,000, it could tie up assets unnecessarily now that the exclusion for an individual exceeds $11 million (unless your assets have also grown dramatically).
You Come Into a Windfall of Money
If you finally get that huge payday from the lottery ticket you bought or inherit money, consider updating your will so you can ensure proper tax planning. For example, you may want to start gifting money to younger family members’ 529 college savings plans, or create a donor-advised fund to both shield some money from taxes and leave a legacy to a cause you believe in. Also, you may want to reconsider when and how much money you are leaving to certain people or charities.
You Can’t Find Your Original Will
A formal, original will matters and photocopies are very difficult to validate. If you can’t find your will, or if you agreed to have your attorney hold onto your original will and now don’t want to rehire him or her, make sure you replace that will with a new, original one that explicitly states it invalidated all prior wills.
You Move to Another State
Any time you move to a new state, review your will and other estate-planning documents in light of that state’s laws. Your will is administered in your state of residence when you die and that state’s laws apply — not the laws of the state where the will was written.
State laws regarding wills vary, and you shouldn’t assume that your will made in your former state meets your new state’s legal requirements.
For example, states have varying laws regarding the number of witness signatures needed on a will for it to be valid. If you move from a state that only requires one witness to a state that requires two and haven’t updated your will, this will likely be problematic.
States also differ regarding which types of wills are valid. Some allow self-written wills but have rules about how they must be written. In one state, a will you write yourself may have to be entirely in your own handwriting; in another, you could be able to type it and just sign at the bottom.
If you move to a different state, you will have to review your will once more, as each state will have different rules and regulations regarding estate taxes and property. You should consult an attorney in your new location to make sure your will is optimized for your new state and complies with the laws in that state.
Changes in Your Relationships
Life happens. Your relationships with people named in your will and how you feel about them may have possibly changed over the years for a variety of reasons. You may want to reconsider whether you still want to leave your jewels to your ex-best friend.
In these instances, you may want to modify your will to readjust who gets what. You may want to assign new guardians for your children, change your trustees, executors, and even your heirs, or reallocate certain assets to different people.
Or you may still want a lifelong best friend to receive a certain meaningful item. You can modify who gets what throughout your life as these relationships change, to make sure those closest to you are the ones who benefit from your estate.
And there are other situations beyond deteriorating relationships that qualify as good reasons to update your will. Perhaps someone in your will is no longer of sound mind and will not be capable of acting in the role you have designated as a guardian, executor, etc. A person listed in your will may even have passed away.
Go through your list of heirs, representatives, guardians, trustees, or executors. Consider whether their circumstances have changed in some way.
Losing Property (Ademption and Abatement)
If you leave all your property to one person or a group of people, there is no need to change your will if you acquire new items of property or eliminate existing ones. Those individuals take all of your property at your death, without regard to what it is.
But if you have made specific bequests of property that you no longer own, it is wise to make a new will. If you leave a specific item—a particular Tiffany lamp, for example—to someone, but you no longer own the item when you die, the person named in your will to receive it probably will not. In most states, that person is not entitled to receive another item or money instead. In some states, however, the law presumes that you wanted the beneficiary to have something—and so gives him or her the right to a sum of money equal to the value of the gift. While this may be what you want, it could still disrupt your plan for how you want your property distributed. The legal word for a bequest that fails to make it in this way is “ademption“.
However, in some circumstances, if a specific item has merely changed form, the original beneficiary may still have a claim to it. Examples of this are:
a promissory note that has been paid and for which the cash is still available, and
a house that is sold in exchange for a promissory note and deed of trust.
A problem similar to ademption occurs when there is not enough money to go around. For example, if you leave $50,000 each to your spouse and two children, but there is only $90,000 in your estate at your death, the gifts in the will must all be reduced. In legal language, this is called an “abatement“. How property is abated under state law is often problematic.
So, you may want to review your will to reconfigure how your current personal property will be distributed. You can avoid these problems if you revise the type and amount of your bequests to reflect reality—a task that requires the commitment to make a new will periodically.
Losing Children and Adding Grandchildren
If any of your children die before you and leave children, you should name those grandchildren in your will. If they are not mentioned in your will, they might later not be legally entitled to claim their parent's share of your estate. Update your will in these circumstances.
Unavailability of Beneficiaries
If a beneficiary you have named to receive property dies before you, you should update your will to reflect a new recipient, especially if you named only one beneficiary for a bequest and did not name an alternate—or if the alternate you named is not still your choice to get the property.
Unavailability of Guardians or Property Managers
The first choice or alternate named to serve as a personal guardian for your minor children or those you have named to manage their property may relocate far away, become disabled, or simply be discovered to be unsuitable for the job. If so, you will want to make a new will naming a different person in these circumstances.
Unavailability of Executor
The executor is the person you appoint to administer your estate and is responsible for making sure your will provisions are implemented. If you decide that the executor you originally named is no longer suitable—or if he or she dies before you do—you should make a new will in which you name another person for the job in these circumstances. Perhaps other family members, who are now older, would be better placed to manage your estate after you die.
Losing Witnesses
The witnesses who sign your will are responsible for testifying that the signature on your will is valid and that you appeared capable of making a will when you did so. If two or more of your witnesses become unable to fulfill this function, you may want to make a new will with new witnesses—especially if you have some inkling that anyone is likely to contest your will after you die. But a new will is probably not necessary if you have made your will self-proving.
You’ve Sold your Home and Bought Another
If you own a different home than the one when you wrote your will, your will needs updating to reflect your new address. Most wills don’t simply state that you give your home, for example to your children. They say you give your home, located at a specific address, to your children.
You Made a Gift to a Child
If you downsized after writing your will and gave, say, your antique dining room table to one child, but the will says it will go to another child, things could become awkward between them when your will is administered. Similarly, it can be problematic if you made a gift to one child, but the amount isn’t balanced with what you’ll leave to another child in the will. Any gifts that could affect items or amounts listed in your will necessitate an update to your will.
Your Charity Relationships have Changed
Perhaps you have developed a relationship with a charity or other organization for which you wish to provide after your death. It could be that since writing your will, you’ve become a board member for a charity or now volunteer at a nonprofit. Or, for example, you become passionate about a specific cause and decide that you want to leave a large portion of your estate to some charity that champions it, requiring an update for the document. Conversely, you may have had a strong affinity to an organization listed in your will but no longer feel that way. That means it’s time to fix the will, too.
One Child Has Become Your Primary Caregiver
If a son or daughter has devoted a great deal of time (and maybe money) to taking care of you since you wrote the will, you may want to update your document to reflect your gratitude to your caregiver. If you do, be sure to explain this to your children or leave details about your intentions in the will.
Estate Taxes
Your assets are growing, so tax planning could save your heirs thousands in federal estate taxes. The time to act is when you and your spouse have a combined net worth, including house, retirement plans, and insurance proceeds, that approaches the amount vulnerable to the federal estate tax ($23.16 million for couples in 2020, $11.58 million for singles). You can give an unlimited amount to your spouse tax-free, by designating it in your will or by owning all assets jointly, for example.
State estate taxes, imposed by 14 states and the District of Columbia, can also be an issue, although less so as states raise the amount that is exempt from estate taxes so wealthy retirees won’t decamp to another state.
Remarriage and Blended Families
You and your new spouse may have to plan for children from prior marriages on both sides and for children you have together. Consider a prenuptial agreement, should you want to keep assets separate and nullify your inheritance rights to each other’s estates.
You’ll probably want to make a provision for your new spouse and any step-children and still be certain your children from the previous relationship are provided for. To do this, talk to an estate-planning lawyer about a qualified terminable interest property trust -- QTIP, for short. This trust can be set up in a will to give your spouse the income from the trust property and some rights to the principal. But when he or she dies, the assets go to the beneficiaries you have chosen.
Death of Spouse
The death of a spouse is another time after which you will want to update your estate plans. If you left a significant portion of your estate to your spouse in your will, you need to review and update it. Most wills should have backup plans set up for if your spouse predeceases you, but it is still a good idea to double-check. You may also want to change how you’d like to distribute your assets or switch your backup recipients.
In addition, there may be tax benefits to disclaiming some of your inheritance in favor of alternate beneficiaries, such as your children, if your spouse’s estate is subject to the federal estate tax and you have enough assets of your own, including liquid assets.
You’ve Had Significant Changes To Your Assets or their value has changed
Another time you may want to update your will is if you’ve had a substantial increase or decrease in the value of your estate. There are many reasons that this may occur.
Perhaps you invested wisely and substantially boosted the value of your estate, or maybe a family member passes away and leaves a large inheritance to you. You may have made a large purchase, such as an expensive car or a vacation home, or on the flip side may have sold one and now have the cash value. Your stock holdings may go way up (or way down!). Perhaps you have bought or sold a major asset or started a business.
If it is a significant decrease in assets that you’ve encountered, it’s time to re-examine how your assets are distributed. For example, you may want to re-think your plan to leave $50,000 to each of your seven grandchildren, and the rest to your three children, if your assets have shrunk from $1 million to $400,000. Since the value is no longer as high as it was, you may no longer have the funds you had intended to distribute. In these cases, you will need to update your will to reflect your current situation.
Maybe your will states exactly how much money you will give to each of your three children. But the size of your estate isn’t what it was when you wrote the will — it might have grown or shrunk. The dollar amounts noted could create challenges for your executor. If so, amend the will to reflect your current net worth.
Similarly, maybe you wrote the will designating a gift of stock to a certain person or organization upon your death. At the time, the stock wasn’t worth much. But now it is. This, too, might mean you’ll want to update your will to ensure your gift will be what you had in mind.
If you have inherited or earned significant enough funds to exceed the estate tax exclusion amount (over $11 million per person), you certainly need to have a plan to minimize estate tax. If the growth is not that large, you still may have tax issues such as capital gains that could be addressed with the right estate plan. Or your plan for distribution may have changed in light of your good fortunes.
What you thought was a substantial gift may turn out to be worth a lot less at the time of your death. It could make sense to state a percentage rather than a fixed sum or make the legacy index-linked.
You’ve Had A Change Of Mind
Of course, there’s always the chance that you may simply change your mind about certain portions of your will later in life. Maybe you originally created your will when you were a young newlywed or right after you first had children. Your thinking might change as you grow older, and you want to update your will because of changes in your life.
You may decide that you would rather one particular friend or family member receive a gift than another. You may wish to change the guardians you have appointed for your children. There might be a charity not previously mentioned which you would like to benefit.
This could be based on relationships that aren’t what they used to be, or perhaps you’ve just had a change of heart. It’s your will, so you’re allowed to make changes as you see fit for whatever reason. A will isn’t meant to be something you revise on impulse — it requires careful thought, but you can make adjustments quite literally until the day you die.
If the change to your will is triggered by an emotional event, such as being angry with a family member and wanting to write them out of the will, take time to reconsider before you act.
Your Choice of Executor, Guardian, Trustee, or Beneficiaries has Changed.
A will prepared 20 years ago may need no updates if you would still name the same people as beneficiaries, executors, trustees, and so on. However, a two-year-old will could have outlived its usefulness if your choices have changed in the meantime.
Your Spouse Qualified for Medicaid
Qualifying for Medicaid to pay for nursing home care significantly affects a couple’s assets and signals an urgent need for estate plan changes.
A married person’s will almost always leaves the entire estate to the surviving spouse. If your husband or wife is now in a nursing home on Medicaid, you almost certainly have placed most of the marital assets into your name alone during the qualification process. If you die first and it all passes to your spouse, he or she will need to spend down significant sums before qualifying again. You can limit spend-down, in the event you die first, by changing your will or trust.
You Become Responsible for the Care of a Disabled Person
Be it a child born with special needs or an elderly parent who becomes incapacitated, you may wish to take the extra steps needed to provide for this loved one’s care in the event you predecease this individual.
The Birth or Adoption of a Grandchild
You may want to change your will to include a gift for them, even if it just has symbolic or sentimental value.
Regular Checkups
The passage of time is reason enough. Even if you have had no major life events, if you haven’t reviewed your will in three to five years or more, right now is probably a very good time to do so.
Conclusion
Life wreaks havoc on even the best-made plans and changes in your life affect what you include in your will and what state and federal laws will be applied to enforce it. You may sell one house and buy another. You may move to another state. You may divorce. You may have or adopt children. Eventually, you will face the grief of losing a loved one. Not all life changes require you to change your will. However, significant ones often do. In these situations, you should discuss with an attorney what changes you might need to make to your will.
