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Retirement and Estate Planning
 

Wills

Keeping Your Will Up-To-Date
If you don't have a will, your state of residence has one for you. It probably does not distribute your assets the way you would prefer.  Preparing a will is the best way to be certain your property is distributed according to your wishes. What many people don’t realize is that keeping your will up to date is as important as having a will. That’s why you should review your will with your attorney regularly.

Marriage, divorce, and remarriage 
Life events can have a major impact on financial planning documents. For example, if a widow or widower remarries, it is important that the will is updated to show how the children from the previous marriage and the new spouse should be provided for in the will.

A new heir 
Updating a will is especially important when you have a minor child because your will allows you to name a guardian to care for your child in the event that something happens to both you and your spouse. If you don’t name a guardian for your child, the courts will appoint one and it may not be whom you would have selected.

Death of someone named in the will
The death of a named executor, guardian, beneficiary, or trustee signals a need to make changes to those provisions in your will.

Substantial increase/decrease of net worth 
If you win the lottery, get a large personal injury settlement, or receive a large inheritance, additional tax planning might be necessary to minimize the tax bill on your estate. On the other hand, a significant decline in your financial assets might dictate altering your specific bequests or making other modifications.

Life relocation to another state 
If you relocate, you should have an attorney in the state of your new residence review your will. This is especially important if you move to or from a community property state. Although all states recognize a will that was properly created in another state, there may be some nuances that need to be addressed.

Tax law changes 
Updating your will allows you to take advantage of recent developments and new techniques in estate planning. Considering that estate tax law changes frequently, it’s important to review your will on a regular basis.

Changes to your intentions 
Changing your mind about something in your will should be handled as soon as you’ve decided. From adding a new beneficiary or charitable donation to second thoughts about your executor or the guardian of your children, be sure to make these changes on a timely basis. If your revised intentions do not make it into print, they will have no legal effect.

How to change your will 
You can’t just make changes on your will. While every change doesn’t necessitate redrafting, marking your will up invalidates it. In the past, changes were made by creating an amendment called a “codicil,” which to be valid, has to be signed and witnessed like a will.

A codicil supplements your will and can modify, further explain, or add, delete or revoke provisions in the existing document. However, in the age of computers and word processing, it is much better to redraft, sign and witness a new will.

Once you have signed your will, keep it in a safe place, such as a safe deposit box, and be sure that your family members know where to find it. You should keep a duplicate unsigned copy handy and review it periodically to see if any changes are needed.

Reviewing your will 
Reviewing your will is an important part of the estate planning process. Working with your CPA and attorney will help to ensure that your will is in alignment with your financial and state planning objectives.

Copyright, The American Institute of Certified Public Accountants