How To Make Sure Your Will And Estate Plan Is Always The Right Fit
Preparing your will and estate plan can sometimes be a simple process, but I’ve found that over the years it can take some clients years before they can fully embrace the notion of preparing a will or estate plan. And that’s before they even decide to make their first appointment with me to discuss it. The trepidation is only compounded with the realization that an estate plan consists not only of a will but a power of attorney and living will.
I remember one client who took four years to complete her will even after we got started – not because it was complicated – but because she had difficulty coming to terms with the decisions she would have to make. We started and stopped the process many times, and while she knew it was important, there was nothing immediately compelling her to finish the process.
To be sure, it takes emotional energy to face your mortality and to think about its possible effect on those you will leave behind. That can be enough to give you pause before creating a will and estate plan, and even the need to revisit and reevaluate it from time to time.
The Importance of Reviewing Your Will
I have previously written how celebrities – with their large contingent of advisors and much assets to protect – sometimes fail to prepare a will or estate plan before they die [See: Celebrities Who Die Without a Will Leave a Dubious Warning]. Even when a will and estate plan is prepared, high-profile individuals are also susceptible to ignoring their documents. Case in point – it is said that at the time of his own death, Robert F. Kennedy’s Last Will and Testament continued to name his late brother John F. Kennedy as a co-executor, co-trustee and successor guardian of his and his wife’s minor children.
One analogy I found in discussing a will and estate plan with clients is to compare it to cooking. Some people tend to approach their plans as though they are simply throwing a bunch of ingredients into a slow cooker that they won’t have to think about until the timer goes off.
Then, it’s “ready to serve” their assets to their beneficiaries. As you might expect, will and estate planning is and should be a little more complex than that and should be approached with this in mind.
The analogy I prefer is to think of your will and estate plan more like a custom-tailored suit. Over time, you may need to get the suit taken in if, for example, you decide to reduce the number of beneficiaries or if your assets have decreased in value; or maybe you need to make the suit larger to accommodate a growing family or other wishes.
Just as a suit can go out of style, that charity you once favored may no longer hold the same appeal. One thing we continue to learn in life is that our circumstances will change over time and so will our wishes, likes and dislikes. Relationships change. People come into and leave our lives.
Those are just the family and personal dynamics. In the larger picture, changes to tax laws occur. Should you move another state or country, your will and estate plan could be affected.
The point is, your will and estate plan cannot remain static even if nothing changes with your wishes. If your ultimate goal is to direct where your possessions go when you are no longer able to make those decisions, the best approach is to build a periodic review into the process.
So how often should you review your will and estate plan? While there is no strict timeframe, we recommend every couple of years – but every five years at the very least. In between those times, you should also review your plans after any significant life change. Examples of these significant life changes are:
- Marriage – yours or your beneficiary’s
- Divorce – yours or your beneficiary’s
- New children, stepchildren, grandchildren
- Changes in dependent children status
- Death of a spouse or beneficiary
- You started a business
- Significant change to the value of your estate
Assets That do Not Need to be Detailed in Your Will
When evaluating your assets and determining specific distributions to heirs, it’s very common to become overwhelmed, thinking that you must detail small personal property such as a set of fine china, keepsakes, heirlooms, jewelry and other items. Don’t worry, these types of items do not need to be listed or detailed in your will.
Imagine how often you’d have to change your will if that were the case. We advise preparing a personal property memorandum that provides instructions on the distribution of these assets that are not otherwise accounted for in your will. You can change or add to it at any time without formality.
This personal property memorandum can be a good way to avoid disputes among family members – especially if the memorandum includes the reasons for your decisions. The personal property memorandum should be signed and dated by you, and also referenced in your will.
Our standing advice to clients is to revisit your will every couple years around tax time to make sure it continues to align with your wishes. It is also a good idea to meet with an attorney to make sure such things as possible changes in the tax code are taken into consideration.
For more information about reviewing your will and estate plan and how to prepare a personal property memorandum, please contact me at [email protected] or 412-288-2218, or any Houston Harbaugh attorney.