WHEN SHOULD ESTATE PLANNING DOCUMENTS BE UPDATED?

It is difficult enough to educate folks to the value of hiring an estate planning attorney to draft a Will, power of attorney and living will. For those folks who have taken this step and have signed estate planning documents, it can also be a challenge to have them consider updating or replacing those documents to reflect life-changing circumstances or changes in law.

In initial client meetings, I request that they bring along those old Wills, living wills and powers of attorney so that I may review and analyze them. I find that these clients often want to believe that those old documents are sufficient for their purposes. Sometimes they are just fine and they do not require any updated or replacement documents.

Often, however, I find that many of those old documents name family members as executors and financial agents who are either deceased or who are no longer the best choices for those appointments. For example, it may be that those old wills do not have alternate executors or do not reflect changes in the law regarding witness self-proving provisions. Or perhaps the power of attorney documents do not contain gifting authority which can be crucial to reduce or eliminate estate taxes. The living wills may not contain language which addresses the federal 2003 HIPPA laws regarding medical information privacy.

If a client’s estate planning intentions change – such as a death of a beneficiary or a wish to disinherit a beneficiary in a prior will – then it certainly is time to update that will. Updating documents can be prompted by more subtle changes, such as an increase in a client’s net worth coupled with changes in the laws regarding estate taxes (which have changed drastically in the past 11 years).

A less subtle life-changing event that should motivate folks to update their estate planning documents is a divorce. When divorced individuals realize that they have not yet changed their wills or asset beneficiary designations since their divorce and that their ex-spouse still may inherit assets from their estate or their 401K, they often become a bit more motivated to update their planning!

Forearmed is forewarned.