When should you update your will? Careful what you read.

When Should You Update Your Will? Careful What You Read

Martin M. Shenkman, CPA, MBA, JD

No shortage of newsletters in your mailbox or inbox, but can you really rely on what you read? A recent newsletter we received from a financial planner identified 6 reasons to update your will. Let’s review it. The newsletter advises you to revise your will if:

• There is a birth or death in your family. Reasonable advice, but most wills are written with sufficient flexibility, so that the birth or death of a beneficiary will often not require any modification.
• Marriage, divorce or separation. This certainly is a time to revise your will, but that is never enough. Powers, living wills, beneficiary designations, and more, all need to be revised. Not just your will.
• If your executor is disabled or dies. Reasonable, but it's likely you’ve named successors and that if the current named executor cannot serve, the successor would.
• Revoking a bequest to a son-in-law or daughter-in-law who has divorced your child. Sure, you’d want to do that, but very few people make such bequests, and generally when they do so, the bequest itself is contingent on a divorce not having occurred.
• If the witnesses are not alive or cannot be located, a codicil could be done with new witnesses. Does anyone actually track the status of witnesses? If you want to modify your will and you’re competent, why use a codicil instead of a new will? A codicil can often introduce interpretation and other problems, such that it can be simpler and safer to sign an entirely new will revoking the prior will. Also, a codicil document is what you changed, creating a more obvious trail that might attract a will challenge.
• Tax law changes. That’s valid, but not enough. Apart from the newsletter listing reasons that probably won’t require action, it ignores many of the obvious and important reasons to change your will. If the value of your estate has changed. It might require additional tax planning, or the ability to forgo otherwise complex planning. Specific dollar bequests might have to be modified to reflect your changed net worth. If the composition of your assets changes, modification may be essential (e.g., you sold your business and now own only marketable assets). If laws other than tax laws change revision may be vital. This could include the rules governing investment, duration of trusts, and so on. Be careful what you read; too often, articles in the mass media lack the sophistication and accuracy you need.