Good Reasons to Update or make a New Last Will and Testament

Our lives continually change over time and so do your estate-planning needs.
Update your Last Will and Testament to reflect family births, deaths, separations, or divorces. Review guardian, trustee, and personal-representative designations. Examine the types of specific gifts to people or groups you have made or wish to make; and recalculate how much life insurance you need, if any.

Even if you have created your Will and an estate plan, it is always a good idea to revisit them as your life circumstances change. Some momentous events in your life will require revisions to these documents and plans such as when:

You Get Married
Your new spouse does not always become your primary heir automatically. For instance, if you don't have children, your parents or siblings would inherit your estate. If you wish to leave all your property to your spouse, a new Will is required. Keep in mind that you cannot disinherit a spouse without his or her consent.

Additionally, if you are living with someone but are not married and you want your significant other to inherit any of your property, you need a Will.

You Become a Parent
How will your children be cared for both financially and physically if both you and your spouse pass away. A Will is required to name a guardian for your children at your death.

You could also consider using testamentary trusts, a trust in your Will, to handle assets that would go to your children.

The execution of a durable power of attorney naming your spouse, or someone else to act for you in financial matters when you cannot, serves to operate during your lifetime but ceases to be useful at your death.

You Approach Middle Age
As you Age, your assets are growing, therefore some tax planning is an excellent way to save your heirs thousands in federal estate taxes. The time to make these tax plans is when you and your spouse have a combined net worth, including house, retirement plans, and insurance proceeds, that comes close to the amount subject to the federal estate tax. You can give an unlimited amount to your spouse tax-free, by designating it in your Will, or by owning all assets jointly, but with a little more planning, a married couple can leave twice the amount of the estate-tax exemption--up to $7 million after the second spouse dies, assuming that Congress reinstates the estate tax that lapsed at the end of 2009 and continues the $3.5 million exemption in effect at that time.

You Get Divorced
Once you are divorced you should review absolutely everything in your estate plan. The people in your life will change and that is why you must change your estate plan. You need a new Will altogether because in most states a divorce automatically revokes the provisions of a Will that apply to a former spouse. In some states a divorce may revoke the entire Will.

You may want to set up trusts to control the assets you plan to leave your children without your former spouse’s involvement and access and you will want to revise any existing Trusts created prior to the divorce, to remove your former spouse as a beneficiary or trustee.

Additionally you should change your durable power of attorney or a Living Will and, unless restricted by a divorce decree, make sure you change the beneficiaries on your life insurance, pensions, and IRA.

You Remarry
You and your new spouse may need to plan for your blended families from prior marriages and you may need a plan for additional children you have together. A prenuptial agreement may be an excellent part of your estate plan, should you want to keep assets separate and nullify your inheritance rights to each other's estates or you may want to provide for your new spouse yet still be certain your children are taken care of adequately.

You Retire or Move to Another State
If you retire and/or move to another state, you should always have your estate-planning documents reviewed taking into account that new state's laws and your current financial and medical needs.

Durable powers of attorney become even more important during your retirement years. For example, if you are stricken with a stroke or Alzheimer's disease, you may become unable to give the required consent for financial transactions, so you want to be sure that you designate an agent to make these important transactions for you if you cannot do it yourself.

Life insurance coverage may not be needed anymore. But if your estate faces an estate-tax liability or if your spouse is dependent on retirement income that will end with your death, consider keeping some coverage. Also, consider taking out a long-term-care insurance policy to help with medical costs.

Your Spouse Dies
This loss can leave you emotionally vulnerable to financial mistakes. Take your time in making any changes. For at least six months, avoid selling your house or making other drastic changes to your lifestyle.

If your spouse's estate is subject to the federal estate tax seek expert tax advice; there may be tax benefits to disclaiming some of your inheritance in favor of alternate beneficiaries, such as your children. You'll need to make a new Will and possibly a Trust.

It is a good idea to review and execute a new durable power of attorney and a Living Will (which expresses your wishes in case of an illness that leaves you permanently incapacitated) every five years so the date of signing is not stale and they continually reflect your current wishes and life’s circumstances.

Put all of your estate planning documents in a safe place, and tell people who need to know where they can be found when needed