How Often Should I Update My Will?

Once you have a will or trust on file, you may think you are done with future estate planning. However, there are several circumstances that have nothing to do with you, and a few that do that could necessitate a change.

5 Reasons to Review Your Will or Trust

• Major changes in your financial situation. You can make changes to your will or trust that will help minimize the financial impact of newfound success. If you have a business that’s about to take off, shifting assets can help you avoid gift and estate taxes.
• Becoming a parent or grandparent. Once you become a parent, you need to be sure and name a guardian for your children, and create a plan to provide for them financially.  Adding grandchildren to the family may mean that you want to restructure trusts or beneficiary designations to include the new little one.
• Changes in the law. Federal estate and gift tax exclusions can change, and Washington has its own estate tax rules and exclusion. Sources: IRS: estate and gift tax updates; RCW 83.100.020. Review your plan under the law that applies to your circumstances rather than relying on an older dollar amount.
• Changes in your health. A serious illness is a reason to review your estate plan and any proposed gifts with your attorney and tax adviser. The federal annual gift tax exclusion is different from the estate tax exclusion and should be checked for the year of the gift. Sources: IRS: gift tax annual exclusion; IRS: estate tax FAQs. Before transferring assets, discuss the timing, tax treatment and effect on your own financial needs.
• Changes in your relationship status. Wills and trusts should be changed immediately upon divorce, separation, or a break up. You’ll also need to change beneficiary designations on things like retirement accounts, life insurance and other jointly titled assets. If you lose a spouse, you may need to redo your estate planning altogether. You also have a limited window of time to utilize any of their unused exceptions.

Over the past 34 years, the Law Offices of Christopher A. Benson has helped clients with estate planning. Contact our Federal Way office for a free initial consultation to discuss your goals and planning options.