2020 has certainly sent us all for a loop. We’ve had months to reflect on our lives and the joys (or lack thereof) of working from home. It’s been a hard few months, but it appears to be coming to a close. Now that quarantine is over and we’re allowed to leave the house, it’s time to check off items on the to-do list that you may have been putting off. Namely, it’s time to review and update your estate plan.
This article will discuss things to think about when checking over and updating your estate plan.
I. Updating Your Will
There are several ways you can go about updating your will, and this section will touch on just a few of them, including: codicils, new wills, and personal property memorandums.
Codicil v. New Will
If you’ve never heard the term “codicil” before, you’re not alone. It’s a legal term, used to describe a minor change to your will. The codicil is a secondary document that you attach to your original will. On the codicil document, you can include changes to existing items in your will. An addendum, by contrast, is something that adds a new element to your will. It is also a secondary document.
However, if you want to make big changes to your will, you might want to simply revoke your old will and make a new one. For example, a change of beneficiary is a big deal, so revoking your old will and creating a new will might be the safest choice. Be sure to follow the letter of the law down to a T, or else your old, inaccurate will might be honored.
Personal Property Memorandum
A personal property memorandum (PPM) is another type of update to your will. A PPM is a separate secondary document, the same as a codicil. You attach it to your will. In the PPM, you list an accounting of all of your personal property. A PPM doesn’t usually have to be signed or witnessed, but you have to refer to it in your will in order for a court to find it valid. Trusts are often a better way to transfer personal property.
Don’t DIY It
If this sounds confusing, that isn’t surprising. A major mistake that people make is thinking they can go onto a legal “DIY” website and write their own will or make changes. It is best to have an attorney help you. The law is tricky and the devil is in the details.
II. Updating Your Estate Plan
The Rule of Thumb
The rule of thumb for updating an estate plan and/or will is to do so every three to five years. The thinking is that, in that time frame, there has likely been at least one or two life changes that might require you to take another look. However, there are other times you should update outside of that “3 to 5” framework.
Other Times to Update
If you go through a major life change or add new members to the family, you should update your will and estate plan to reflect those. These changes can include divorce, remarriage, new babies and other new family members, or changes in health circumstances. You never know what life will throw at you, so it’s best not to stick to the “3 to 5” rule too stringently.
What to Update First
These are just suggestions, but it might be wise to update documents that have to do with your kids or health first. Think about what you prioritize and work backwards from there. If you have a complicated estate plan with a lot of documents, updating/reviewing may be a multi-day undertaking.
Though the rule of thumb says to update your will and estate plan every three to five years, that’s not mandatory. If you’re undergoing a major life change, you should update. Above all, make sure to contact an estate planning attorney to ensure that the process is carried out correctly.