Personal Finance 

Reviewing Your Last Will & Testament

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This is a guest post from Evan of My Journey to Millions.

Like life insurance, someone’s Last Will and Testament is often forgotten about for years. The documents are relegated to the back of the filing cabinet only to see the light of day after something horrible has happened. If I had to give a guess as to why, it probably has to do with the fact that those two items do not effect your day to day life such as over paying for your car insurance or having high interest credit card debt.

Part of every person’s financial review should be a re-reading of their Last Will and Testament. While I may read 4 to 8 Wills a week I can understand why reading one’s own will is not an enjoyable experience. First of all they are usually written in a foreign language known often referred to as legalese, but more importantly it forces you to think about your death and possibly your family’s death. While I can’t make the experience a better one, I can at least provide you with questions to think about when you are reviewing your Last Will and Testament.

This post is part of the 2011 Spring Cleaning Week!

Reasons to Review Your Last Will and Testament

While the main stream media floods you with confusing information regarding the tax changes in 2011 most of the estate provisions are inapplicable to 99% of the Country! Notwithstanding that only about 2% of the Country did pay Estate Taxes and now only about 1% will there are some older Wills which might force surviving spouses to take advantage of certain tax provisions that are no longer applicable. So while you most likely don’t have to worry about it you should be on the look out for terms like “Credit Shelter Trust” when you aren’t worth $5,000,000+! With that out of the way lets get to the real issues which will effect 100% of all Readers.

Let’s attack the main reason why anyone creates a Will in the first place – To make sure the Will still follows your testamentary intent as it relates to the ultimate distribution of your assets.

  • Maybe you left assets to your children outright (rather than in Trust) but they are in the middle of a terrible marriage and might get divorced eventually hence possibly subjecting your future inheritance to possibly being split?
  • Maybe you just don’t like your spouse and want his share to be placed in a marital trust to restrict access and control?
  • Are there any charities you have grown fond of since your last drafting?

The next thing to think about and look for is if your family dynamics have changed.

  • Were you married when the Will was written? If so, I bet it should be updated (some States actually deem the divorced spouse to have predeceased but it is still a good idea to have a new one drafted).
  • Are any of your beneficiaries on or may need government benefits? Then their eventual share may need to be put in a special needs trust.
  • Are there grandchildren you want to direct assets to directly?

Another item to think about is whether you have the same people in your life. When you create your last Will and Testament you put certain people in charge of certain aspects of your life.

  • When you created your Will you named a person you want handling your financial affairs after you die but before they are distributed (The Executor). Is the named person still who you want in charge?
  • You also named a Guardian to care for your person and property. Do you want the same guardian to care for your children?
  • Lastly you may have named a Trustee to control Trusts created within the Will. Is that person still in your life? and Responsible?

While reviewing your Last Will and Testament may not be pleasant, it has to be done. Remember, you are checking to see if your testamentary intent is still met, whether the changes in your family dynamics still work with your Will and whether those people you put in charge are still those people you want running your estate after you pass.

This is a guest post from Evan of My Journey to Millions. Evan is a fellow personal finance blogger, who is also an Attorney and works as a Director with a New York Financial and Estate Planning Firm. If you like what you see here, please consider subscribing to his RSS feed or following him on Twitter.

{ 15 comments, please add your thoughts now! }

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15 Responses to “Reviewing Your Last Will & Testament”

  1. Linda says:

    Why would anyone want to have a Will? Isn’t a Living Trust, much more cost effective? No Probate!

    • Evan says:

      A living trust may or may not be more cost effective. First thing is first, a living trust is only as effective as those assets that are placed in it. So if you die and your house is owned Joint With Rights of Survivorship with your Husband then he will receive the house free of probate, but when he dies since the house is not owned by the trust then at the second death it will be probatable.

      90% (read: made up stat, but most) of living trusts that I review are UNFUNDED.

  2. Mighty glad to see this from Evan, whose expertise on this subject is substantial. Just finished revamping my will, durable power of attorney, medical power of attorney, and mental health power of attorney.

    It’s important to review these documents every four or five years. Circumstances change…and so do state laws.

    If you have minor children, it’s really important to be sure the people you designate for their care and the provisions you make to support them are kept up to date.

    In my experience, what’s REALLY hard is discussing these matters with adult children. Argha! They just do NOT want to think about the fact that sooner or later you are going to croak over, or about the probability that before that happens you’re going to lose your ability to make your own decisions. Talking about it makes them nuts.

    You need to make intelligent decisions about these matters, and sometimes your adult children just check out emotionally when you try to discuss the inevitable with them. If that’s the case, get a lawyer wise in the ways of the world, and be sure you’ve set things up to make things go as smoothly as possible for them.

  3. billsnider says:

    I just want to add that you should have primary and secondary beneficiaries on all your bank and financial accounts. It makes things easier especially if you do not have hard and sizable assets.

    Bill Snider

    • Shirley says:

      You also should think about an alternate/secondary executor for your will, and name them in that will. I saw one case where, when it came right down to it, the executor simply couldn’t do it.

      • Evan says:

        You both make excellent points about sucessor fiduciaries. However, Bill, while it may be easier if you don’t have sizeable assets…I’d much rather be left a hard bountiful estate as a beneficiary lol

  4. DIY Investor says:

    I have to admit, all other issues aside, that I am shocked at the number of, otherwise very intelligent people, who have not named guardians for their children. They apparently are willing to leave it up to the court to determine where their children will go and who will take care of them if the unthinkable happens.

    • Shirley says:

      I suppose many feel that that their children will automatically be raised by the “next of kin”, without considering that each parent has immediate family.

      Considerations like age, physical and financial ability, similar family values, and even willingness, all come into play with this decision and it can be mind-boggling. It’s also a decision that may well change for any of these reasons at any time.

      Perhaps a separate legally certified statement attached would be more efficient.

    • Evan says:

      DIY Investor,

      You’d be shocked by some of the things I see. I recently ran into what became a client of my firm who was worth well into the tens of millions – WHO DIDN’T HAVE A WILL! LITERALLY NONE. Not a bad one, NONE!

  5. lostAnnfound says:

    RE: Naming a guardian for children. When we did our will/med proxy/power of attorney paperwork after the second child was born, we also assigned my sister as our kids’ guardian. At the time we were told that naming her the guardian does not necessarily mean that she will actually take in our kids and raise them should something happen to us, but she will be the one to decide who actually raises them, which could be her or someone else. Is this correct? Or is this state specific (MA)?

    • Evan says:

      I have never heard that before, but I would check with your legal counsel. However, a thought for you – IF (and that is a big IF) that is how it is done in your neck of the woods why not just name who you want? and if they refuse to act put a successor in it…

      • Strebkr says:

        We came across this a few years back. We actually named the guardian who will take care of the kids. Separate from this we named who will handle the money because we didn’t want them to be the same for other reasons.

  6. zapeta says:

    Lots of great advice! Thank you!

  7. Mark says:

    A pour-over will might be worth mentioning here. Used in conjunction with a trust, it simply “pours” property owned by the deceased into the trust at the time of death.

  8. Strebkr says:

    Anyone name their dog in their will? Or at least where the dog would go?

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