5 common reasons you should update your will

Image1After drafting your will, it may seem convenient to set it aside and believe you've adequately prepared for the future. However, this is often not the case, as various life events may require updates to your will.

Your will functions as a safeguard for your family and assets by specifying how your estate will be managed after your passing. However, just like your wardrobe or appliances in your home, your will may require periodic adjustments to ensure it remains current. Read on for circumstances you may want to consider revising your will.

1. Changes in your family dynamic

One of the most common reasons for revising a will is when you undergo a major life change, which includes events like childbirths, adoptions, and marriages. These changes can affect you personally or apply to other members of your family. In either case, you may wish to incorporate these new additions or changes to your family into your will.

Having kids

When you become a parent, not only does life get busier, but you also need to ensure the well-being of the newest addition to your family. One way to address this responsibility is by incorporating your children into your will, ensuring their care in case something should happen to you. While your original will may have included your children, circumstances can change, especially if you have additional children after your initial will was drafted. In such instances, it's crucial to revisit your will and designate a guardian for any new members to your family, ensuring their protection in the event of unforeseen circumstances involving you or your spouse.

In most cases, a will automatically covers any child born after its signing. Typically, your assets are distributed evenly among your children, and even if you expand your family after drafting the document, these new additions should be treated as if they were born before. Nonetheless, it's advisable to scrutinize the language in your will to confirm this equitable distribution, possibly consulting an attorney to guarantee that all your children receive their fair share.

Another aspect to consider concerning your children is when they reach adulthood. If your will was created when your children were young, it's wise to establish trusts for their assets. However, as they grow older and potentially have families of their own, adjustments may be necessary. Since they no longer require guardians, you might need to modify your will by appointing them as executors and reevaluating the allocation of assets to reflect their changed circumstances.

Getting married, divorced, or widowed

When your marital status undergoes any changes, your estate plan should adapt accordingly. For instance, in the event of a divorce, it's highly likely that you won't desire to leave financial assets or other belongings to your former spouse. In such cases, it's advisable to consult with an attorney to explore necessary modifications to your will. Furthermore, you should engage in discussions with your attorney on how to safeguard both yourself and your assets in case your former spouse decides to contest your will, which is within their rights.

Within your will, it's typically essential to eliminate your ex-spouse as a beneficiary or trustee on any living trusts you may have established. You'll also need to revise trusts that manage the assets designated for your children. Additionally, you may need to modify your power of attorney, living will, and the beneficiaries designated for your retirement plans, pensions, and life insurance.

If you end up getting married to someone else in the future, the process may need to be repeated — especially when considering children from prior marriages on both sides or any additional children born from the new union. If you opt for it, a prenuptial agreement can be established to maintain the separation of assets, potentially waiving inheritance rights to each other's estates.

Another situation to consider in the context of marriage is if your spouse passes away. In these unfortunate circumstances, it is advisable to review your will. Most wills should already have contingency plans in place for such an event, but it's a prudent measure to verify them. You may also wish to alter your preferences for asset distribution or designate alternative beneficiaries in the event of your spouse's predecease.

2. Relationships have changed with individuals in your will

Throughout your life, your relationships with individuals who were once significant may evolve due to various factors. These individuals may be someone you've appointed as guardians for your children, your trustees, executors, and even your heirs. Life events can lead to shifts in your feelings toward specific individuals mentioned in your will. If you find yourself in this situation, you might consider amending your will to either exclude them or adjust the distribution of assets. You may opt to designate new guardians for your children or reassign certain assets to different beneficiaries. Alternatively, you might want to pass on a special item to a lifelong best friend. Your options for tweaking your will are wide-ranging, allowing you to change who gets what as your relationships evolve, making sure those you care about most benefit from what you leave behind.

Besides shifts in your friendships and relationships, there are other situations that call for updating your will. For example, you could have developed a strong bond with a charity you'd like to support after you're gone. It's also possible that someone originally included in your will isn't mentally fit to take on roles like guardian or executor. Furthermore, someone mentioned in your will might have passed away. In any of these cases, you have the freedom to make changes to reassign your assets and modify the terms of your will as needed.

3. You’ve relocated to another state or country

You may be wondering: do you need to update your will if you move? The answer is yes — especially if you move out of your current home state! When you relocate to another state or country, it becomes necessary to revisit your will since each state has its unique set of rules and regulations concerning estate taxes and property matters. Don't assume that your previous will is automatically applicable in another state. It's advisable to seek legal counsel to ensure your will is tailored to the specific requirements of your new state and remains legally sound.

4. There are significant changes to your assets

Another circumstance when revising your will may be necessary is if there’s been a substantial increase or decrease in the overall value of your estate. This can occur for various reasons, such as an inheritance following the passing of a family member, significant financial changes like buying a home, or selling a large sum of assets resulting in having a substantial amount of cash. Any significant shift in your estate's value should prompt a reconsideration of your will. In situations involving substantial sums of money, you can also consider creating a trust to shield your heirs from substantial taxes after your passing. Seeking advice from an experienced professional can aid in crafting a well-thought-out will strategy for such circumstances.

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Conversely, if you've experienced a significant reduction in your assets, you'll also need to revisit your will to determine how the revised distribution should take place. As the total value is no longer as high as before, the resources you initially intended to distribute may no longer be available. In these situations, updating your will to reflect your present circumstances is vital.

5. You simply changed your mind

As you progress through life, there's always the possibility that you might have a change of heart about certain aspects of your will. Perhaps you initially crafted your will when you were newlywed or just after starting a family. As you age, your perspectives may evolve, prompting a reevaluation to determine if updates are warranted due to the shifting circumstances in your life. It's important to remember that your will is entirely under your control, and you can make adjustments as you deem necessary, for any reason. Creating a will is not a hasty decision — it requires careful consideration, and you have the flexibility to make modifications right up until your final days.

Options for updating your will

If any of the reasons listed above apply to you and you’re currently wondering how to update a will, there are two approaches you can take:

  1. Modify your current will

  2. Legally draft a new one

Modifying your current will

If you decide to revise your existing will, you can alter, remove, or introduce new sections to accommodate new assets and terms. These alterations are typically executed through a codicil, which is a separate document functioning much like an amendment to your original will, extending its terms.

A codicil is an ideal choice if your will is particularly extensive, and you only intend to make minor adjustments. Additionally, it can serve as a safeguard for your initial will. If, for any reason, you weren't in the right mental state when creating the codicil, a family member can potentially challenge and annul the additional clauses without affecting the original will.

Be advised that codicils should only be prepared by an attorney. While they may appear straightforward to create independently, even the slightest mistake can render them invalid.

Legally drafting a new will

If you require extensive alterations to your will, starting fresh may be the most suitable approach. Legally drafting a new will takes precedence over your current or old one and doesn't present a significant complexity in its creation since you're already familiar with the process.

While we've highlighted some of the more typical reasons for updating your will, there are numerous life events that could prompt adjustments. A valuable practice is to schedule regular reviews of your will, perhaps on an annual basis, ensuring that your will consistently aligns with your preferences of heirs, asset allocation, etc.

It’s important to ensure your estate is managed in accordance with your wishes upon your passing, so keeping your will up to date is the most effective way to uphold peace of mind.

Plan for your future with a professional

By seeking the guidance of a professional, you not only provide financial security for your loved ones but also alleviate potential disputes and legal complications. This proactive approach to planning for your future — and the future of your estate — offers peace of mind, assuring that your legacy endures and that your wishes are faithfully carried out for the benefit of future generations.

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Pure Financial
Written byPure FinancialContributing writer

Pure Financial Advisors, founded in 2007, is a reputable fee-only Registered Investment Advisor (RIA) headquartered in San Diego, with branch offices across California, Seattle, Chicago, and Denver, and plans for further expansion.