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Details You Can't Afford To Miss When Updating Your Estate Plan

Jul 26, 2022 10:00:00 AM

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When your life changes in a big way, your will must change with it. Marriage, divorce, new children or grandchildren, and significant financial changes are all reason to revisit your last will and testament.

This is a legal document that demands to be done right. Here are a few critical details to remember so that your heirs don’t run into big headaches!

Codicil or New Will?

There are two ways to amend your will: through the drafting of a new will or through a document called a codicil. Codicils have no standard format and serve as amendments to an existing will. While more convenient, codicils have fallen out of fashion in the digital age because drafting a new will isn’t nearly as time-consuming. Still, if you have a minor or straightforward change to make or a detail to elaborate on, a codicil may be easiest.

If you have multiple changes to make or several existing codicils, consolidate all those changes in a new will rather than risking confusion.

Should You Loop in a Financial Advisor?

You need more than a lawyer when it comes to updating a will, particularly if it involves the beneficiaries of any financial accounts or assets. Your financial advisor can help ensure that changes to your will are reflected on those accounts. Forgetting to make or change beneficiary designations on accounts outside of the scope of a trust puts your heirs in probate, which can be expensive and time-consuming.

Together, a lawyer and financial advisor are well-equipped to ensure any inheritance is transferred cleanly in a streamlined process that doesn’t cause stress or infighting.

Do You Have the Right Agents in Place?

The right person to act as the executor, trustee, or other agents of your will isn’t always who you’d expect. Too many people wind up trying to appease their family members rather than select the person who will do the best job.

You want someone close by who has a knack for organization and the capacity to deal with things. You’re much more likely to run into headaches if you try to appoint co-agents. Get one person that you trust who is capable and willing.

Are There Ancillary Documents to Consider? 

Just as you’ve got to be sure your beneficiaries line up between your will and financial accounts, there are other pertinent ancillary documents to update. Neglecting these matters complicates things more than you’d think! Even if you’re not changing the who on these documents – such as power of attorney – contact information and templates can change. As you make changes to your will, keep a running list of other documents to revise alongside it.

Any Outdated Assets?

Your financial circumstances may change in unexpected ways over the years. Those changes may be welcome or not, but regardless, your assets are bound to change. For example, if you plan to leave property to an heir when you die but that property is sold, your heir gets no compensation for that “missing” asset unless you make a revision.

As you acquire, sell, and trade assets, you want to be sure that they’re all accounted for and that your family isn’t left inheriting things that you no longer have ownership over.

What's the Big Picture?

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Revising your will, whether by codicil or a new will entirely, isn’t cheap. Lawyers may charge hundreds of dollars for each update. While you don’t want to put off changing your will when needed, it’s also wise to consider your full estate plan and not just the one aspect you must change. You might face a domino effect in changing one thing, so sit down and ensure that you’re not causing a contradiction or gap because of your revision. It will be something you’ll just have to fix – and pay for – later.

Bonus: Have You Revoked the Previous Will?

When establishing a new will, the old will must be revoked. In your new draft, you must include a written statement that revokes the previous will and any attached codicils. Have all previous wills destroyed so there’s never a question as to which is the current and valid will. Follow your state’s procedures for executing and validating your current will.


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