Having a will in place gives many people a false sense of security. The sense of security comes from the belief that once a last will and testament is created, they can relax knowing that their intentions regarding distribution of their assets will be taken care of when they die. If there is one thing you can count on in life, it’s that things change dramatically. Our lives change while we’re busy making other plans. We promise ourselves that later we’ll get around to updating our estate plan (with new planning documents such as a new or revised will, trust, healthcare power of attorney and financial power of attorney).
When to Update a Will
To protect your assets and loved ones against the negative consequences of failing to update your will, you should review your will each time someone included in your will dies, becomes incapacitated, gets divorced, or has a child. Also, you should update your will each time a major event in your life takes place. Make sure you have protected your property from the potential for delay and additional expense in the probate process, which can affect the timing and amount of assets each beneficiary in your will receives. To keep your estate plan current, including your will, trust, and incapacity planning documents, get the advice of an estate planning attorney.
What Might Happen When You Fail to Update a Will
The experience of Alice and Ed, married for twenty years, provides a good example of why all of this is so important. After six years of marriage, the couple had their first child, Patricia. Afterwards, Alice and Ed each created a simple will leaving everything to the surviving spouse when their deaths occur. They also named the other as designee in a financial power of attorney and a healthcare power of attorney, in case they became incapacitated. One year later, Alice’s sister, Elena, had a traffic accident that left her unable to care for herself. Alice and Ed bought a condo in their names for Elena to live in and provided her with financial assistance. Later, Ed passed away of natural causes, leaving all of his assets to Alice. She carried on taking care of Patricia and Elena. Later that same year, Alice suffered a stroke and became incapacitated. Six months later she passed away.
When Alice became incapacitated by the stroke, she had no designated financial power of attorney other than Ed. This meant no one could access her assets to help care for Elena and Patricia. Family and friends had to be solicited to help cover the substantial costs. When Alice died, she had not yet changed her will to include her sister, which meant the condo and funds that Elena relied on to survive were inherited by Patricia. Patricia was still a minor and could not make decisions regarding these assets. In addition, Alice’s will and all of her assets had to go through probate, which took ten months. The probate process can cost more to complete than the administration of a fully-funded trust. Therefore, the probate process delayed the receipt of money and property by the Patricia.
All could have been avoided had Alice and Ed consulted an estate planning attorney. Alice could have updated her estate plan by adding a trust for Elena immediately after her sister became unable to care for herself. She could have also updated her will again after Ed died.
We Can Help You Avoid Costly Mistakes
An estate planning attorney would have done several things to make sure Alice and Ed’s intentions were fulfilled and their assets protected.
First, the attorney would have made Alice and Ed aware of the appropriate what if questions that needed to be asked. What if one of you dies and is survived by the other; do you have an alternate power of attorney designee you would like to name? What if both of you die at virtually the same time?
Second, the attorney would have advised them of ways to provide assistance to Patricia and Elena that would survive both of their deaths but would allow them to maintain control over their assets while they were alive. The attorney would have given them options for avoiding probate such as a living trust. The attorney would have noted the importance of keeping their bank account and insurance policy beneficiary designations current. The attorney also would have reviewed any jointly-owned property. There are many aspects to wills and estate plans that an estate planning attorney addresses to help people achieve their goals while alive and at their deaths.
To protect your loved ones, let the estate planning attorneys at Stross Law Firm, P.A. help you create an estate plan that carries out your intentions. We use modern estate planning methods to avoid probate and other legal processes, such as a formal guardianship, that you may not desire. We can also help you keep your will and other estate planning documents current. Contact us at (813) 852-6500.