Is it Time to Update Your Will?

When it comes to your estate plan, one of the biggest misconceptions is that there is an automatic expiration date on your will. The thinking goes that after a while, that old will that's been sitting at the back of your filing cabinet for 10 years or so isn't valid anymore. But many people are surprised to learn that unless it has been revoked or superseded by a new will, those yellowed pages that haven't seen the light of day in over a decade are technically still valid and would be the way your estate would be divided if you were to pass away.

So the real question is: How often should you update your estate plan documents? There's no legal rule requiring an update after a certain amount of time, but it's generally a good idea to understand the major factors you should consider that may trigger the need for new documents.

Why Do They Even Need Updates?

An Estate Plan includes legal documents such as wills, trusts, powers of attorney, and advance healthcare directives. These documents protect your assets, minimize tax burdens, and clearly plan your legacy. However, if outdated, they may no longer accurately reflect your intentions, leading to unnecessary complications, disputes, or financial losses for your beneficiaries.

Some benefits of regular updates are:

Your beneficiaries and heirs receive the intended assets.
Appointed guardians for minor children remain appropriate.
Tax laws and legal requirements are met.
Healthcare and financial powers of attorney reflect your current preferences.
Your personal representative and trustees are still suitable choices.

When Should I Update My Will?

As you can see from the above image, there are 7 common life events that serve as good guideposts for when you should be updating your estate plan.

1. Marriage or Divorce

Getting married or divorced significantly affects your estate planning. If you get married, you may want to include your spouse as a beneficiary or designate them for specific roles, such as personal representative or trustee. On the other hand, after a divorce, failing to update your estate plan could result in your ex-spouse inheriting your assets or having control over crucial decisions regarding your estate.

2. Birth or Adoption of a Child

One of the biggest life events that triggers the need for new documents is when a new child comes into your life, whether through adoption or birth.

Name guardians for minor children - only a will can perform this important task!
Establish a trust to manage their inheritance.
Update beneficiary designations to include your new child.

3. Death of a Beneficiary or Fiduciary

If a named beneficiary, personal representative, trustee, or guardian passes away, your estate plan needs to be updated to reflect new designations. Failing to do so can create confusion or even legal battles among surviving heirs.

4. Significant Financial Changes

A change in financial status—whether through acquiring significant wealth, starting or selling a business, or experiencing a financial setback—should trigger a review of your estate plan. Major financial changes might require adjusting your asset distribution, modifying trusts, or implementing new tax-saving strategies.

5. Relocation to Another State or Country

Different states and countries have varying laws regarding estate planning, inheritance taxes, and power of attorney regulations. If you move, reviewing and updating your estate plan ensures it remains compliant with local laws. One of your first steps when you get to the new location should be to review your old documents with a local attorney to see if your documents could benefit from the local laws of your new location.

6. Changes in Tax Laws

Estate and inheritance tax laws have evolved over time. Periodic reviews with an estate planning attorney can help ensure that your plan remains optimized for minimizing tax liabilities and taking advantage of legal benefits. You need to consider the federal estate tax, but depending on where you are living, there may be an estate tax that you should consider on the state level as well.

7. Retirement or Health Changes

Retirement often brings shifts in income, investments, and healthcare needs. Additionally, any major health diagnosis or long-term care considerations should prompt a review of medical directives, powers of attorney, and financial provisions.

The Timeline

Even if you don't have any major changes, I still recommend that you review your estate plan at least every 3 years. If there's nothing that needs to be changed, then you're all set. But while checking in, you can also check on:

Your assets are titled correctly.
Your beneficiaries are up to date.
Your will and trusts align with current goals.
Your powers of attorney are assigned to trusted individuals.

How to Update Your Estate Plan

Taking that first step to update your will can be the biggest barrier that most people face, although it really doesn't need to be. All you need to do is reach out and have a conversation with your estate planning attorney (or find a new one if you've moved or you'd rather not work with that attorney again). While you may have spent a lot of time and money when you first created the documents, when it's time for an update, things may be much more straightforward.

To make it easy, here's the four steps I recommend when it's time to update your will:

Consult a Lawyer: Professional advice ensures your updates are legally sound and reflect your current wishes accurately.
Create a Codicil: A codicil is an official amendment to your existing will. It must be signed and witnessed like the original will, but it's not a long, drawn-out document or process.
Draft a New Will: If the changes are substantial, drafting a new will might be simpler and clearer. Ensure you revoke all previous wills to avoid confusion.
Inform Relevant Parties: Make sure your executor and other key individuals know about the updates and where to find the new documents.

Updating your will is a vital part of estate planning. By keeping your will current, you ensure that your estate is managed and distributed as you intend, providing peace of mind for you and your loved ones.

Need Help Updating Your Will?

If you've got a will that needs to be updated, or if you don't already have an estate plan, let's schedule a Legal Strategy Session online or by calling my Edina, Minnesota office at (612) 294-6982 or my New York City office at (646) 847-3560. My office will be happy to find a convenient time for us to have a phone call to review the best options and next steps for you to work with an estate planning attorney.