As a reader of our firm blog, you may have already signed your estate and disability planning documents. If so, great job! It’s possible that your documents may not require changes for some time. However, it is vital that you review your documents and assess whether any changes in your life need to be reflected in your Will, Trust, Power of Attorney, or other documents.
An obvious reason for changes is if you wish to adjust gift provisions. Maybe you want to add another family member or friend as a beneficiary. Maybe you want to keep the same beneficiaries but change the percentage that each will receive. Maybe you feel a need to leave gifts to a nonprofit organization or your church.
A less apparent reason to update documents is changes in the lives of the beneficiaries. For example, if a beneficiary has become disabled, receiving an inheritance could ruin their eligibility for certain public benefits. In that case, you may wish to change an outright gift to a gift in trust for that particular person. On the flipside, maybe you left gifts to children in trust believing that they could not handle large amounts of money, but they have since matured. In that case you may wish to remove restrictions on gifts so that each child can utilize the gift as they see fit.
Provisions outside of the distribution section deserve attention, too. When you review your documents you should ask yourself whether the people named to serve in various roles (such as attorney-in-fact, trustee, and executor) are still appropriate. The people you chose when you signed your Will at age 40 might not be the same as who you feel most comfortable with at age 60. It is important to name people who are capable and willing to serve in these roles—and this includes alternates.
Lastly, a change in assets could require changes to your documents. If you purchased a vacation home where you now spend a portion of the year, you may wish to execute a Power of Attorney and Appointment of Health Care Representative that are tailored to the state where the home is located.
Additionally, out-of-state real estate is a reason why many people decide to utilize a trust as part of their estate plan. An increase in net worth could leave you with federal estate tax consequences A decrease in net worth may mean it’s time to investigate asset protection planning.
Invest in yourself and your family by taking the time to re-read your estate and disability planning documents. There’s no sense in having a Will or Trust that is not catered to your wishes and your family’s needs. We recommend that clients review their documents at least every three years.