Six Signs it is Time to Update Your Will

Your last will and testament is the foundation of your estate plan. Your will explains how your property should be distributed to beneficiaries, designates a guardian for minor children, and describes your final wishes. It can be thought of as an instruction manual in probate showing how you want your assets to be distributed. 

Creating a will is essential. However, it is not a one-and-done task. Many different life changes and circumstances will necessitate an update of your will and other estate planning documents. In this blog, we will explain five situations in which it may be necessary to change or update your will.

You Got Divorced or Legally Separated

One of the most common reasons that individuals need to modify their will is because they ended their marriage. If you are divorced or soon will be, you probably do not want your soon-to-be ex to inherit your property upon your death. It may also be necessary to change your power of attorney documents and name a new power of attorney agent. 

You must also change beneficiary designations on life insurance, annuities, 401k plans, and IRAs. If you do not change the named beneficiary, your ex may still receive the assets upon your death. A special order entered by a judge during the divorce may be needed to split up assets in a 401k or IRA.

One of Your Beneficiaries Suffers from Addiction or Creditor Problems

Drug addiction, alcoholism, and other types of addictions can happen to anybody of any age, race, or income level. If one of your beneficiaries has developed a substance abuse problem, addiction, mental health condition, or personal problems that make him or her unable to manage money wisely, you may want to update your estate plans. A similar predicament occurs when an intended beneficiary has significant creditor problems.

If you have a beneficiary that is impaired by drugs, gambling, or other issues, you may wish to use a trust to hold their share of the inheritance to protect them from the problems that they have with money. Consider using an estate planning tool such as a spendthrift trust to leave property to an individual who may not be able to handle a significant lump sum inheritance.

New Family Members Have Been Born

A new child, grandchild, niece, nephew, or other family member is a cause for celebration. It is also a reminder that it is time to review and update your estate plan. 

If the new child is your own, make sure your will designates a guardian for the child in the event that you and the child’s other parent pass away before the child reaches adulthood.

You should also have the will establish a trust for the minors to hold their share since they cannot legally own the share until they are at least 18 years old. If the children are not financially mature enough to handle their money at age 18, the trust may delay the disbursement of funds until they are older and able to manage money more responsibly. 

You Moved to a New State

If you have moved out of the state of Illinois or plan to move, make sure your will reflects the current state laws in the new residence. Remember, your will is administered according to your state of residence when you pass away, not the state in which it was originally written.

It is possible that moving to a new state will not require changes, but it is best to double-check to make sure.

You Experienced Substantial Changes in Financial Circumstances

Have you been promoted, taken a new job, started a business, or incurred significant debt in the past few years? Any major changes in financial circumstances should trigger a review and possible modification of your will. For example, if you have sold property that was designated to a certain beneficiary, you may want to redistribute your remaining property so that this beneficiary still receives something.

Your Relationships Have Changed Since You First Created the Will

Relationships naturally change over time, and sometimes, the individuals to whom we used to be the closest are no longer a significant part of our lives. Similarly, you may grow especially fond of certain friends or family members throughout the years. Make sure to regularly review your will and ensure that it reflects your current wishes regarding who should receive your property upon your death.

Contact our Naperville Estate Planning Lawyers

If you are interested in creating a will for the first time, modifying your will, or establishing a trust, power of attorney, or other estate planning instruments, we can help. Contact the skilled Naperville estate planning attorneys at the Gierach Law Firm for personalized advice and assistance. Call 630-228-9413 to set up a consultation.

Source:

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075500050HArt%2E+IV&ActID=2104&ChapterID=60&SeqStart=5300000&SeqEnd=6750000