5 Times to Review Your Estate Planning
There are some common points in life when you should review your estate planning documents, which include wills and trusts, that you’ve created for your loved ones and your estate. You need not just a simple will, but a living will that dictates your end-of-life medical care. This isn’t only to change a trust or trusts for your children or grandchildren, but any purposeful trust you’ve made to take care of someone or an organization.
Some major life moments and decisions necessitate reviewing these documents to make sure they accurately reflect the change these life moments have made. This can be to make sure your assets go to the right person, that new assets are accounted for, or that your life isn’t put into the hands of someone you no longer trust. So if any of these events happen in your life, contact the Scranton estate planning attorneys at Mazzoni Valvano Szewczyk & Karam in order to update your wishes with new and improved estate planning documents.
1. After Buying/Inheriting Major Assets
Far too often, people assume that after a large purchase or inheritance, like stocks, houses, cars, or other large properties, that their will or trust accounts for it. This is largely not the case.
For trusts, in most cases, even new amounts of money may not have anywhere to go. A trust has set parameters regarding what is and isn’t in it when it’s made. Any specific piece of property will not automatically go into a trust since you place assets in it when the trust is created. While it’s possible to have a will that puts everything into a trust, more often than not, you’d have to make a new trust with that will. Trusts can become irrevocable upon your death, which would make it impossible for a will to legally add anything to them.
When it comes to wills, outside of a living will, wills are not changed so much as replaced. If your previous will set specific assets and monetary amounts to certain people and organizations, your new assets will not be included. This will leave them in a sort of limbo where your heirs can fight over them.
An estate planning attorney can help you write a new will that includes these assets. Even if it’s the difference of a few lines, a new will has to be made and the old will needs to be destroyed.
2. After Getting Married and/or Divorced
Marriage and divorce directly affect your estate planning documents. Whether it’s to keep assets from or assure they go to your spouse, current or past, you need to update your estate planning documents.
When you’re married, your assets will most likely be assumed by your spouse should you pass before them. This means you’ll need to update your will or create a trust after the wedding to account for this. Maybe there are some assets you want to give to someone, like your child who you want to assure is taken care of, another relative, or an organization. For this, you need to review your estate planning documents to create a trust. That’s how you can avoid some assets going directly to your spouse.
Maybe you don’t need to keep anything from going to your spouse. Or maybe you need to update a trust to make sure items go to your spouse. You can also make a joint will with your spouse so your affairs can be perfectly united as best they can. An attorney can also help with that.
Also, when you’re married and you don’t have a living will or designated healthcare power of attorney (HPOA), it’s given to your spouse automatically. But, if you have a previous living will and HPOA, you should update those documents so your spouse is able to make your end-of-life decisions should you want them to. Living wills and HPOA can grant someone else preference in making your end-of-life medical decisions.
Depending on how amicable your divorce is, you may want to update your will and trust to make sure your ex-spouse does or doesn’t get your assets. Divorce in Pennsylvania voids your ex-spouse from getting anything, but they can make arguments that you reconciled or intended to still leave them your assets upon passing. In other instances, this can lead to them receiving nothing when you did intend for them to receive assets.
You’ll want to update your will and trusts to include or expunge your ex-spouse as you see fit. The most important thing to update would be your living will and HPOA. These documents don’t always operate on the same rules as other estate planning documents. These come into play when you’re alive, so divorce doesn’t affect them.
For many reasons, you may not want your ex-spouse in charge of your end-of-life care.
3. Death of a Spouse
The death of a spouse is not wished on anyone, but more often than not, one spouse will pass on first. If your spouse passes away before you, you’ll inherit all of their assets, but they won’t necessarily be included in your estate planning documents. Unless you planned your estate planning documents around what should happen if you or your other spouse outlived the other, you need to update them.
Old trusts won’t contain anything you gained from your spouse, and your heirs can fight over them after you pass on. Wills need to be updated to account for your spouse no longer being there, so no assets are left in limbo.
Also, now that your spouse can’t make decisions for you should you need end-of-life care, you need to update your living will and HPOA.
4. Your Retirement
If you retire with the intent of never working again, you need to update your documents so they may best provide for you. If you and/or your spouse have assets that you plan to live off of, you should prepare your documents so they pass to the other should you pass away. If you don’t, when one of you passes away, you may put your spouse in a bad situation.
You may think that because you’re married, your assets will pass to your spouse. However, some things that will pay for your retirement don’t automatically pass to a spouse. Retirement plans and medical benefits you’ve received from work or personally created cannot always be included in wills and trusts. You need to speak to an estate planning attorney who can investigate and confirm what you or your spouse will receive once one of you passes away. That way, you can properly prepare.
5. After the Birth or Adoption of a Child
When you have a child, they become the most important person in your life, even before your spouse if you have one. You should want to ensure that you have cared for them as well as you can after you pass. But if you don’t update your will or make a trust, there’s no guarantee that you have done that.
Especially if this is a child from a relationship outside of your marriage–from a previous relationship or affair–you need to state them in your will and/or in a trust. Otherwise, they could stand to lose their inheritance to your spouse, your spouse’s children, or children you have with your spouse.
Review Your Estate Planning Documents With the Attorneys at Mazzoni Valvano Szewczyk & Karam
We can help you account for everyone and every asset in your estate when you need to update it. There’s no need to hope that what you have will account for everything you or a loved one needs. Contact the estate planning attorneys at Mazzoni Valvano Szewczyk & Karam for assistance.