When should you update your will or estate plan? If you’ve taken the time and energy to create a clear, orderly plan to pass your wealth to your family, you might also wonder when it’s time to revisit these plans. We collaborated with Meghan DeSpain, a Seattle-based estate planning attorney, to outline ten occasions to consider a refresh to your legal documents.
Consider updating your legal documents when you:
- Have kids. When you become a parent, you are likely to change who you want to inherit your assets. You should also consider nominating guardians for your children in the event you pass away before they become adults rather than leaving this decision to the state.
- Kids move out or become adults. Now that your kids are old enough to care for themselves, how are they doing? Could your 23-year-old handle a large sum of money if you left it to him? Or perhaps your kids are old enough to become your nominated executors and powers of attorney, the ones in charge if you passed away or couldn’t make your own decisions.
- Retirement. If you’ve built substantial wealth, retirement is a time to address potential estate tax issues. It’s also a great time to make sure assets are properly titled and beneficiaries are up to date.
- Move to a new state. As a general matter, all estate plans, wills, trusts, and powers of attorney should be amended or replaced to comply with the laws in your new state. If you live in multiple states, you need to make sure assets in both states are adequately protected.
- Death of your parents. Inheritance can substantially change your financial position and potential estate taxes you might owe. It’s also a common time to think about your own legacy and the impact you want to make on charities and your family. As your thinking evolves on these topics, make sure to update your legal documents accordingly.
- Current executors or agents for powers of attorney are aging, losing capacity, or die. Your executor guides your estate after you pass away and your agent for powers of attorney makes decisions on your behalf if you are incapacitated. You need healthy and competent advocates as you age, so make sure to update these positions if your current representatives lose the ability to serve.
- Children develop some kind of special needs. Inheritance by an individual with special needs requires careful and specific planning or they may lose certain government benefits. Consider preparing your will or trust to preserve benefits for your child now or in the future.
- Children develop severe addictions or dependencies. Sometimes the best way to care for a loved one with substance use concerns is to limit their access to assets they’ll need in the long run. Trusts and other limitations can be established to oversee or limit a child’s access to inheritance until they are more stable, or the funds can be directed to support their recovery.
- Diagnosis of dementia or cognitive deterioration. If you have been diagnosed with any kind of cognitive disorder, this is the time to make sure your advanced health care planning is in order. You also may still have adequate capacity to amend your will if desired based upon the proper evaluation of an attorney or health care professional.
- Windfalls. Whether you’re receiving substantial stock options, an inheritance, or selling the family business, a windfall represents a significant change in your financial status. You may be exposed to new tax considerations. Or perhaps you and your family have enough to meet your goals and would like to consider gifts to family or charity.
While this is not an exhaustive list, these are good reasons to reach out to your attorney and wealth management team to provide updates and find out if changes are needed. Your trusted advisors can provide feedback on what needs to be amended today and what to look for down the road. With the right plans in place and a trusted team to help keep your plans up to date, you can rest assured that you, your family, and the causes you care about will be well served by the wealth you’ve worked so hard to build!
Legal services are not offered by Alterra Advisors, LLC, Lion Street Financial, LLC, or Lion Street Advisors, LLC.
The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.