05 Sep Updating Your Will: When and Why You Should Do It
As your life changes, it’s important to update your will to reflect your final wishes after your departure. As you flip through the different pages and chapters of your life, your wishes could change. Life is full of changes. Children are born, houses are built, and life insurance policies are acquired.
Your will is a legal document depicting the legacy you would like to leave, monetarily or otherwise. The will you have vastly impacts who inherits what after your death and how assets and estates are distributed. A will that doesn’t reflect your true wishes isn’t feasible. So, how does one go about updating their will, and when and why should you consider this?
Read on for answers to all of these questions and more.
When and Why Should You Update Your Will?
There are various reasons why you might wish to update your will, including; major life events, the birth or death of a child, the death of an executor, the acquisition of new assets or estate, changes in tax laws, or merely changes in your wishes.
Marriage, divorce, death, the birth of a child, the death of a beneficiary, or even a major row are all causes for changes you might want to make to your will. The birth of a child may necessitate the addition of a new beneficiary to the will. In contrast, the death of a beneficiary may demand changes so that the assets are not distributed interstatedly.
If you acquire new estates or assets, you might wish to specify who these are distributed to, so there is no cause for intestate succession. Someone may wish to contest your will, too, so you must write it fairly and distribute assets as fairly as you can.
Lastly, changes in tax law might make you want to edit your will. The tax implications of different assets can influence how you distribute your estate. Sometimes, the estate tax can be levied on the estate you wish to distribute, potentially affecting the portions your beneficiaries receive. Strategic estate planning, like the introduction of a trust or life insurance policy, can help reduce estate tax implications.
Sometimes, income generated after your death by your assets can be taxed, too, such as with a retirement annuity. A good understanding of tax laws and a reliable attorney can help you mitigate potential losses.
How to Update Your Will
Before updating your will, decide what changes you would like to make– who would you like to inherit your assets: your spouse, children, perhaps a friend? Then, decide how you would like your assets to be distributed– outright, in a specific order, through a trust. After this, decide how you’ll lessen estate taxes: a trust, life insurance trust, or charitable donation.
The next step is to gather the information you need to update your will. This may include: your current will and any previous wills you may have; a list of your assets and liabilities. (your bank accounts, investments, real estate, personal property, and any debts you owe); information about your beneficiaries (this includes their names, addresses, relationships to you, and any special needs they may have); information about your executors and trustees (the people you trust to manage your estate after you die); your tax return and other financial documents. This information can help you determine the tax implications of your estate.
If you need help creating a will or changing it, contact Credit Boost: your partner in wills and estates.