If you have a well-written, legally defensible will and trust, you are ahead of the game. That is great not only for you but for your family. However, that is not the end of the story. Once you have a will and a trust, you can’t just lock them away and forget about them. Your life might evolve and change, and those documents will need to follow suit.
To ensure your will and trust adequately represent your current situation and needs, you must update them as your life progresses. However, a significant question we hear all the time is, how often should that be? That answer can change from person to person depending on their life, but it is recommended to update your will and trust frequently.
So, here is everything you need to know about when you should update your will and trust.
The Benefits of Updating Your Estate Plan, Will, and Trust Often
Just being told to update your will and trust doesn’t properly portray the benefits of doing so. It could seem like an added chore on your ever-growing to-do list, but it is very crucial for you and your family as your life progresses.
A significant legal benefit to updating your will and trust on a regular basis is that you stay up to date with the current estate and state laws in your area. Estate laws have the ability to change throughout one’s lifetime, and to ensure you stay protected, updating your will and trust is wise.
Additionally, updating your will and trust will keep up with your assets and financial situation. There’s a chance you’ll create these legal documents while still working in your career. When you get promoted or retire, you will need to update your will and trust to match those changes.
Another benefit to keeping your will and trust updated is the possible prevention of family drama. If these legal documents are “old” when put into use, the family may not find them credible, and it could lead to arguments and drama. It is best to keep these updated so the family knows exactly what you wish with no possible grey areas.
It Is Recommended To Update Your Will and Trust Every 3 to 5 Years
To put it in years, it is recommended that you update your will and trust every three to five years. For an average individual, three to five years can be enough to ensure you are staying ahead of anything that needs to be added or changed in your legal documents. However, it is also common for some people to have 20-year-old documents that may not need to be updated unless statutes have changed.
Outdated documents can make the probate process more time-consuming, and probate can take anywhere from a few months to two years. Probate proceedings are typically public record and may involve high court costs, legal fees, and attorney’s fees.
However, this can vary from person to person. If you run a business, have generational wealth, own many fluctuating assets and investments, or have a growing family, it can be wise to update your will and trust more frequently to ensure you are not missing potential changes in your needs or the laws surrounding your assets.
The best way to ensure you are staying up to date with your will and trust is to partner with an estate planning attorney who can keep you accountable, no matter your lifestyle or career.
You Should Update Your Will and Trust If You Move States or Countries
One significant time you should update your will and trust is if you move states or countries. Yes, even if you still live in Kansas City, but now live in Kansas City, Kansas, rather than Kansas City, Missouri, or vice versa. Laws change from state to state and country to country, and property titled solely in the deceased person’s name may have to go through the legal process in that state’s probate court. It is essential that your will and trust continue to follow the laws and adapt to the necessary changes. Ensuring you stay aligned with the state’s or country’s laws will keep your assets properly protected and your wishes accounted for in ways that follow the rules and regulations at hand. A revocable living trust can also help avoid probate at death, which is especially useful if you have moved or own property in more than one place.
You Should Update Your Will and Trust If There is a Marriage, Divorce, or Minor Children Involved
Marriages and divorces can be extremely impactful events in one’s life. On one hand, if you are to get married or get divorced, your will and trust are going to need a review to ensure that names are added or replaced, assets are accounted for or stricken from the legal document, and planning reflects support for a surviving spouse after marriage. Married couples may also need trust planning updates because some trusts divide into two after the first spouse’s death. When you get married or get divorced, there are laws and regulations to account for outside of a will and trust, but it is essential that all avenues are considered.
On the other hand, if a close family member or friend gets married or divorced, you might need to update your will and trust for similar reasons. If it is a child who marries, you may want to add the new spouse to the will, or if a child gets divorced, you may want to do the opposite. If your will and trust are very family- and friend-oriented, these events can greatly impact your legal documents.
You Should Update Your Will and Trust If Your Assets, Financial Situation, or Estate Taxes Significantly Change
One of the most significant details within your will and trust is your assets and financial situation. So, if anything changes within those areas, you should be updating your will and trust immediately. This includes if you purchase property, a vehicle, start a business, or inherit a significant asset. Large purchases like that should be accounted for in your will and trust to ensure they are protected down the road, and major asset shifts can also affect taxes, including possible estate taxes for larger estates and the need for tax planning when navigating estate taxes.
Additionally, this is the case if you sell a property, sell or pass down your business, or if your financial situation changes in a not-so-positive manner. You want to ensure your legal documents match what has happened in your life, so you are properly representing yourself and your wishes. Estate taxes are generally due within nine months of death, which is one reason to review plans after major financial changes and consider future income taxes.
On this topic, it’s important to note that digital assets and financial accounts are just as important to include in your will and trusts as physical ones. With the rise in digital currency and online businesses, you don’t want to miss these significant assets when writing out your will and trust. It also helps to review beneficiary designations when assets change, especially on retirement accounts, savings accounts, life insurance policies, and insurance policies, so you can transfer assets smoothly and provide resources where you intend.
You Should Update Your Will and Trust If Your Opinion on Beneficiaries, Executors, or Trustees Needs Changing
Another time you should be updating your will and trust is if the people in your life change, whether that means they are no longer in your life, have passed away, or new people have entered your life, including guardians for minor children, if any. If there are changes to the people you consider in your close circle, those need to be properly represented in your will and trust.
There is a large likelihood that those individuals are named as beneficiaries, executors, and trustees in your will and trust, and an executor handles the estate’s financial affairs according to the will’s instructions, so if those individuals suddenly become irrelevant in your life, the last thing you want is for them to inherit your car under sudden circumstances. Executors may also need to address creditor claims because creditors have a limited time to make claims against the estate. You want to update these names as soon as possible. Trustee and beneficiary choices may also need updating if you want a trust to manage assets for a beneficiary with special needs or because of changing individual circumstances.
Partner With an Estate Planning Attorney To Keep You Accountable
One of the most important things you can do for yourself if you are asking this question or starting the process of estate planning is to partner with an estate planning attorney. A legal will is a document that states how your property should be distributed after death. It must usually be validated through probate, the legal process that confirms the document is authentic. No matter how many assets you have, what your wishes are, or what kind of estate you own, an estate planning attorney can help you not only create a legally sound estate plan but also ensure it is regularly updated to follow your wishes.
An estate planning attorney can keep you accountable for updating your will and trust, reaching out after a certain amount of time, or at least ensuring you have someone to go to when your life changes in a significant way. They can also review other legal documents and estate planning documents, including a power of attorney, a living will, and a healthcare proxy, so someone you trust can handle financial decisions, medical decisions, and healthcare planning during incapacity. They can help set up your estate plan for success. An attorney can also determine whether a revocable trust, irrevocable trust, or pour-over will is appropriate, including when a pour-over will should transfer remaining assets into a trust after death.
If you have further questions or wish to start the process of your estate plan, please contact the team at Janssen Estate Probate & Elder Law.