Your oldest child and her partner have just celebrated the arrival of your first grandchild. You’re thrilled to welcome this new addition to the family and excited for your daughter’s journey into motherhood. But at the same time, you have some practical concerns, such as the legacy you might leave behind as a grandparent. The parents have been together for years, though they never married — so how do you work this little bundle of joy into your will? What if your daughter predeceases her partner while your grandchild is still a minor? How would the assets you leave behind be administered for the child’s benefit?
There are many circumstances that might prompt you to consider making a change to your will. Federal and state laws around inheritance change frequently, so many Financial Professionals recommend you update it at least every five years, or whenever there’s a significant life event. Here are just some events that might merit revisiting what you intend to leave behind.
A New Child, Stepchild or Grandchild
If you have a child, or if one of your children does, take a fresh look at your will. Children have legal interests in your assets. Especially if you aren’t around to make sure they’re protected, your will can at least protect them financially. An expanding family may call for special expertise — such as the creation of a trust — to help ensure matters are handled smoothly and according to your wishes in case of your absence.
You Divorce — or Your Heir Does
If you’re considering a divorce, the time to change your will is before you file the legal papers. First, your spouse probably has rights to some of your assets if you die before completing the divorce. And once you file, you may not be able to change the will until the divorce is final.
If your heir is contemplating a divorce, consider that any assets you leave to them could well become marital assets of their next partner. If a divorce is in the wind, talk to a Financial Professional; divorce actions can drag on for years in some cases, so preemptively changing your will may be the best course of action.
You Lose Your Spouse
In most cases, your spouse would be your presumptive heir even without a will. However, a will or trust that specifically passes any assets that are not jointly owned and titled to your spouse can help keep your estate out of probate, which can be time consuming and expensive. If you’ve done things right, your spouse would be set up to avoid probate. But if you lose your spouse, you’d need to rework your will to provide the same level of assurance for your other heirs, such as children, grandchildren, friends or even causes you believe in.
Your Assets Change Significantly
If you sell a business, or receive an inheritance yourself, you may suddenly have a large increase in your assets. Different states have different thresholds for taxing estates. You should consult an estate planner and consider restructuring your will in light of the new assets.
Talk to a Pro
If it’s been a while since you last reviewed your will, make an appointment with an attorney experienced in wills and trusts — and with your Financial Professional. Be sure to make notes about how your life has changed in the interim so they can give you the best possible advice. When the will becomes an issue, you won’t be there to express your wishes or help the ones left behind. Take the time to set everything straight now.
Sources
Kiplinger.com, 12 Different Times When You Should Update Your Will
Smartasset.com, When an Inheritance Can Become Marital Property