The old farmhouse you grew up in; your grandmother's antique cameo necklace; a mysterious locked box; a thick tome filled with the rich history of your ancestors—and more than a few secrets. Whatever items you have cherished throughout your life, you want to make sure will go to people who will love them just as you have if you pass away.
But creating a Will or Estate Plan, and tucking it away for safekeeping until it's needed, is not enough. You need to be proactive and make sure that it is updated regularly and that your executor and loved ones know where to find it. Otherwise, your gift and good intentions could turn downright frightening.
Here are some reasons why you should update and designate Beneficiaries in your Estate Plan regularly:
If you had a falling out
Just because someone is the right or appropriate person to leave something special to after you die does not mean they always will be.
If your mother passed down a piece of antique jewelry to you and you want to keep it among the women in your family, you may choose to leave it to your sister after you are gone. But if you have a serious falling out, as siblings sometimes do, you may change your mind. If you designated your sister as the Beneficiary of your mother's antique jewelry in your Will but choose to leave it to another sister or cousin instead, you will need to update your Will.
If someone got married
Milestones are a great indicator of when to update your Estate Plan. If you don't already have a Will, getting married is a good reminder to get it started sooner rather than later.
Combining your life with a partner means having someone you can count on and someone who can count on you. It can also mean that if you unexpectedly pass away, you will leave behind people who rely on you. After you're married, you may want to update your Will to include your new spouse as well as any new, significant family members.
Having a plan that lays out your final wishes and what should happen to the things you loved most will eliminate any potential confusion among family, old and new.
If there has been a divorce
But not all marriages last forever. Another common time to take a new look at your Estate Plan is when there is a divorce. Getting a divorce dissolves a marriage. It does not automatically remove your spouse (or ex-spouse) from your Will or Trust-Based Estate Plan.
If you named your spouse as the sole Beneficiary of your Estate in the event of your death, chances are you aren't going to want them to inherit everything you own if they're now your ex. Talk about a nightmare! Just as you didn't just marry your spouse but their entire family, updating your Will or Trust may require removing more than just your ex-spouse.
If a Beneficiary has died
If it has been a long time since you have updated your Will, you could have one or more people listed who have since passed away. It may be well past time to look over your last wishes and update them where you can.
If the Executor of your Estate cannot find one of your Beneficiaries, it could end up causing confusion and frustration among those you leave behind. The case of a missing Beneficiary could hold up Probate Court, drawing out the length of time it takes to settle your Will and close your Estate. This can also be expensive, racking up court and attorneys costs as your Will is held up in Probate Court.
If a Beneficiary Can't Be Found
After someone's death, the Executor of the Estate ensures that the items named in their Will get to the correct Beneficiaries. Part of the job of the Executor is to track those Beneficiaries down.
If an Executor cannot locate someone who has been named in a Will to give them their inheritance, they must convince the Probate Court that they made a good faith effort to locate them. An Executor is required to prove to the courts that they have:
Sought the Beneficiary's last known mailing address
Reached out to their spouse, if they have one, and any living relatives
Reached out to previous employers
Spoken to community members who may know where they are or what happened to them
Once the Executor exhausts these efforts to locate a missing Beneficiary and a particular amount of time has passed, the Probate Court Judge will rule that the Beneficiary be treated as if they are deceased. In that case, the deceased Beneficiary's inheritance is distributed among the other Heirs and Beneficiaries. This process can vary, as can the length of time it takes, depending on your state.
Update Your Estate Plan Before It’s Too Late
Estate Planning is one of those things that people tend to put off. It's easy to think that you have all the time in the world and will get around to it eventually. But as this time of year reminds us, accidents happen, and your time may be up before you've planned for it.
Be careful about waiting too long to make your Estate Plan. Here at Trust & Will, we make it easy to get started. Through our website, you can complete your Trust-Based Estate Plan, Will, and Nomination of Guardian documents all from the comfort of your own home. Get started today to set yourself on the path for success and financial wellness!
Not sure where to start? We offer a free online quiz to point you in the right direction of where to begin.