Much like a life insurance policy, a will needs to be updated regularly in order for it to serve its purpose properly.
Both are used to protect their survivors from financial hardships when they pass away. Unfortunately, many people sign a will, put it in a safety deposit box or a drawer in their home, and then completely forget about it.
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If the circumstances in your life have changed over the years and are not reflected in your will then your will could cause more harm than good. This could result in a family dispute or even lead to a court proceeding if matters are not resolved.
According to Fish & Associates, there five key circumstances that highlight the importance of updating one’s will, which include:
1. Marriage or Re-Marriage- Traditionally, married couples will name each other as their beneficiary until they have children.
2. Separation- If you are separated or going through a separation, you should be aware that your will is not revoked by the separation. This means that if your separation spouse is named as your beneficiary from before the separation, he or she will still inherit when you pass away.
It is advised that you make a new will after a separation occurs unless you want your separated spouse to inherit.
3. Relationship with Executors- By definition, an executor is a person entrusted to wrap up the deceased’s earthly affairs. It is important to periodically review the appointment of the executors in your will as situations and relationships change over the years.
4. Major Asset Changes- If you’ve entitled your son or daughter with ownership to a residence, you must revise your will to reflect this change. Failure to do so could cause future inheritance issues.
5. Children- Once you have children, it is highly advised to update your will to include them. The beneficiaries listed in a will – and various other retirement and life insurance accounts – may change following other legal actions like a divorce or marriage.
This checklist may well help you take care of your family by making a will, power of attorney, living will and funeral arrangements.
- Make your will.
- Consider and set up a trust.
- Make the necessary health care directives.
- Create a financial power of attorney.
- Take steps to protect your children’s property.
- File all critical beneficiary forms.
- And above all, consider life insurance.