7 REASONS TO REVISE YOUR WILL OR TRUST

by Margaret Norman, Attorney

Seven could be a lucky number for you, if it helps you to examine your estate planning, and make sure your estate goes to the people you care about. Sometimes a family presents an old will or trust that gives a big share of the estate to someone that the decedent wanted to disinherit. They simply crossed out the name. Unfortunately the crossed out heir can still inherit, because a line through their name doesn’t cancel the bequest.

Changes in Your Life

1.         YOUR MARRIAGE; ESPECIALLY IF THIS IS NOT A FIRST MARRIAGE.

If you have remarried you definitely want to change your Health Care Power of Attorney also, as well as the trust and/or will. Be certain to look at how title to property is held, and whether your IRA, pension or insurance policies show the previous spouse as beneficiary.

Your divorce agreement or judgment needs to be available for review. Sometimes that spouse has rights to insurance or property.

2.         YOUR OWN DIVORCE OR THAT OF A CHILD OR OTHER HEIR.

Check the executor or trustee nominations in your trust or will, and be sure those are up to date. Sometimes a daughter or son is your trustee or executor and their spouse is the alternate. If one of your children is even considering divorce, be certain that you do not jointly own property with them. You may like an ex-daughter or son-in-law and want to leave them an inheritance in their own name, on the other hand you may want to be sure that they are not the trustee of the money you are leaving to a grandchild.

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3.         BIRTHS OF CHILDREN, GRANDCHILDREN, OR THE ADOPTION OF A CHILD OR GRANDCHILD

If you have provided bank accounts for existing children or grandchildren, you may want to add a new one for the new addition to the family. Your will or trust needs to be carefully reviewed to make sure that you have not created a problem by omitting the new family member. Sometimes I see handwritten wills that leave a specific gift to “my grandchild” and now there are three of them.

4.         DEATH OF FAMILY MEMBER

A deceased spouse, child or other heir will change the way in which your estate is divided.

If your spouse had children from a previous marriage you may want to make provisions for them in your will.

5.          HEALTH CHANGES

If you or your spouse is in poor health you certainly need to review your trust or wills. You may want to make gifts to family members now, and be sure your insurance policies and IRAs are correctly designating beneficiaries. If you have a child with health problems there are special needs trusts that can be set up. You might need long term care and want to find out if you qualify for Medi-Cal. Get good legal advice before putting property in somebody else’s name.

Sometimes a child or grandchild gets involved with drugs or crime. After 24 years as an attorney, its been my experience that the heir with a drug problem usually manages to go through their inheritance with amazing speed. I have never seen the money change their lives for the better.

6.         RETIREMENT

Retirement often means that you take in less money than you spend, and changes in the amounts of specific gifts. It can mean a sale of property and move to a different location. A piano or vacation home might no longer be available to go to an heir. A trust needs to be updated so that the new residence or other real estate is in the trust. All of these changes need to be reflected in the will or trust to avoid conflict. As you get older, it is less likely that there are a lot of cash assets to pay any medical bills or taxes, or unexpected bills of the estate. You need to be sure that it is clear where the money will come from to pay those bills.

7.         CHANGE IN TAX LAWS

25 years ago a client told me that the Tax laws had been simplified and would never change again.

Too bad that wasn’t true. Capital gains laws change, estate tax laws change back and forth. Your estate plan cannot possibly predict what the laws will be 10 years from now. It is even less likely that your 10 year old trust correctly guessed what today’s laws would be.

We review and revise old trusts & wills or create new ones. Make an appointment to meet with Margaret Norman, Attorney by calling 310-376-7873. Helpful documents to bring would be: all old will or trust documents, and a list of the names of your heirs. Start thinking about who would be the trustee or executor, or guardian if you have minor children.