You have a will, so you can rest easy, right? Not necessarily. If your will is outdated, it can actually cause more harm than good. Even though it can provide for some contingencies, an old will can’t cover every change that may have occurred since it was first drawn.
Take a look at what has changed.
Professionals advise that you review your will every few years and more often if situations such as the following five have occurred since you last updated your will.
Family changes. If you’ve had any changes in your family situation, you will probably need to update your will. Events such as marriage, divorce, death, birth, adoption or a falling out with a loved one may affect how your estate will be distributed, who should act as guardian for your dependents and who should be named as executor of your estate.
Relocating to a new state. The laws among the states vary. Moving to a new state or purchasing property in another state can affect your estate plan and how property in that state will be taxed and distributed.
Changes in your estate’s value. When you made your will, your assets may have been relatively modest. Now the value may be larger and your will no longer reflects how you would like your estate divided.
Tax law changes. Federal and state legislatures are continually tinkering with federal estate and state inheritance tax laws. An old will may fail to take advantage of strategies that will minimize estate taxes.
You want to support a favorite cause. If you have developed a connection to a cause, you may want to benefit a particular charity with a gift in your estate. Contact us for sample language you can share with your attorney to include a gift to us in your will.
Watch Out for Assets Not Covered in Your Will. The following components of your estate plan are distributed by means other than your will and may require additional strategies:
Title arrangements. These can supersede the terms in your will. For example, you may hold bank accounts, securities or your home in a form of joint tenancy with someone else, which entitles the survivor to full ownership of that asset.
Retirement Plans. After your lifetime, retirement plan assets will be paid to the beneficiaries you have designated in the plan.
Life Insurance. Proceeds are payable to the beneficiaries you have named in your policies.
To be continued next week………………
The North Alabama United Methodist Foundation is ready and available to assist you if you have questions about any of these items referenced above. Get started preparing your will free of charge.