Just when you think you have it all under control…life happens. When life’s big changes come along, it is time to think about re-visiting and updating your Legacy Estate Plan.
Here are just a few key times in your life when it is important to review and update your estate planning documents (will, trust, powers of attorney etc.).
- As a regular practice
We recommend that you generally review and consider updating and revising your estate plan every 3-5 years. Major life events happen in some cases that would adjust your initial plans, and having a regular practice to review your documents every three to five years ensures that you will not pass over any of those necessary changes. Some examples that trigger those needs are provided below.
Also, it is important to note that certain documents are not recognized by certain institutions if they are too far outdated. A good example of this is your Financial Power of Attorney, which grants a person of your choosing to make financial decisions for you should you ever become incapacitated, Most banks have stopped accepting these if they are more than three years old. If any one of your documents are not accepted out of your Legacy Estate Plan, it could lead to costly means of obtaining those necessary rights related to that particular document.
This could trigger the need for a Guardianship or a probate depending on the circumstances. Either option can be an extreme waste of your hard-earned estate. This is why we strongly emphasize the importance of regularly updating your documents.
- You Retire or Move to a New State.
One of the best things about Arizona, where we practice, is that it has so many great retirement communities and so many wonderful things to do. You will not get rained out of that round of golf, trip to the Grand Canyon, or hike around here.
But just as Arizona’s desert and mountains are unique, so are its trusts and estates laws. Because each state in the Union has its own somewhat unique laws when it comes to drafting and executing estate planning documents like wills, trusts, powers of attorney, and health care documents, this means that although your properly drafted estate planning documents might function in a new state, your estate could have extra hurdles to overcome. So the best practice if you have moved or recently retired, is to have your estate planning documents reviewed and revised if necessary.
- You Get Divorced.
This one is a complete life-changer. All the people in your life change. And so do most of the documents in your life as well. Just as you will need to change the names on your savings accounts and credit cards, after a divorce you need to change your Last Will and Testament. That is because some states have laws that say your prior last will is invalid if it gives part or all of your estate to your former spouse, but other states may still enforce your will. Which makes it important to consult with experienced counsel in the state where you live. If you do not make a new will after you get divorced, it means that your ex-spouse could still inherit your property.
- The Death of a Child or Spouse.
This heartbreaking change in your life also triggers the need to change your estate planning documents.
Why? Because your child or your spouse are generally your beneficiaries.
The death of a beneficiary is one of the biggest problems that can happen if a will or revocable living trust (“Living Will”) hasn’t been updated. When a beneficiary dies before the testator (the person who made the will) or the settlor (person who made the trust), what happens to the beneficiary’s share in the estate? Well, that all depends on what your will or trust says. Which is why, in the event of the death of one of your beneficiaries, you need to update your will or trust–because you will need to decide anew who should get that portion of your estate.
These are just a few examples of when you need to change your estate planning documents. There certainly are many other life events when you need to, or it is a good idea to, revise or update your estate planning documents.
Feeling a Bit Overwhelmed? We Make it Easy for You.
We are experienced trusts and estates attorneys. We offer free consultations. Our offices are located in Sedona, Arizona but we serve Verde Valley and all of Arizona. We can help you with all of your estate planning needs. Call us at 928-282-1483 or contact us here.