You should look at your will and other estate planning documents at least every few years unless there are reasons to do it more frequently. Some reasons to do it sooner include marriage, divorce, birth or adoption of a child, coming into a lot of money (i.e., inheritance, lottery win, etc.), or even moving to another state.
CNBC’s recent article entitled “When it comes to a will or estate plan, don’t just set it and forget it. You need to keep them updated,” says that one of the primary considerations for a review is a life event — when there’s a significant change in your life.
The pandemic has created an interest in estate planning, including a will and other legal documents addressing end-of-life considerations. Current research shows that 18- to 34-year-olds are 16% more likely to have a will than those in the 35-to-54 age group. According to a survey, in the 25-to-40 age group, just 32% have documents. Even so, fewer than 46% of U.S. adults have a will.
If you’re among those who have a will or comprehensive estate plan, here are some things to review and why. In addition to reviewing your will regarding who gets what, see if the person you named as executor is still a suitable choice. An executor must do things such as liquidating accounts, ensuring that your assets go to the proper beneficiaries, paying any debts not discharged (i.e., taxes owed), and selling your home.
Likewise, look at the people to whom you’ve assigned as the power of attorney and health care agent. If you become incapacitated at some point, the people with that authority will handle your medical and financial affairs if you are unable. The original people you named to handle specific duties may no longer be in a position to do so.
Some assets pass outside of the will, such as retirement accounts, like a Roth IRA or 401(k)plans and life insurance proceeds. The person named as a beneficiary on those accounts will generally receive the money, regardless of what your will says. Note that 401(k) plans usually require your current spouse to be the beneficiary unless they legally agree otherwise.
Regular bank accounts can also have beneficiaries listed on a payable-on-death form obtained at your bank.
If you own a home, make sure to see how it should be titled so it is given to the person (or people) you intend.
Reference: CNBC (Dec. 7, 2021) “When it comes to a will or estate plan, don’t just set it and forget it. You need to keep them updated.”
