Q: My sister has a will that is 20 years old. Is it still good?
A: Maybe. It all depends on her current financial situation, family situation, health and plans. If her original will was written when she was single and now she is married, the fact of the marriage is a major change because her spouse has rights in her estate even if the will ignores him or states otherwise. She may now have children and need to provide for them and they were not provided for in the original will. Maybe, as she has aged, there is a need to care for a parent and that is not reflected in her former will.
A will, health care power of attorney and financial power of attorney should be reviewed at least every five years to make sure the document still carries out one’s plan in terms of asset distribution and individuals who will assist in implementing your plans. Maybe a beneficiary has died and a new one needs to be named. A new family member may have been born and needs to be included. A former beneficiary is no longer on one’s favored list. The person who was named as executor has died or is too old to act as executor. The person named on a power of attorney is no longer available or undesirable and needs to be changed. A spouse could have died and the health care power of attorney doesn’t take that into account.
Another area of concern is the fact that after wills are drafted and signed, the client then begins to make changes and how their assets are titled. For example: a client opens a transfer on death account with a stock broker and passes stocks and bonds to a child outside of the will, but the original will took into account the fact that the will was going to account for the stocks and bonds in the distribution among family members. The transfer on death account may not do that and it should be coordinated with the terms of a new will. A client may open a joint account with a child so that upon the death of the client the assets pass directly to the child and not through the will. Is such a gift accounted for in some way in the overall family distribution scheme of assets moving from parent to child at the parent’s death?
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In some cases there is a loss of asset value that affects a will. A new will written today really takes into account those assets owned today and not those of the future. If there is a modest change in the type and value of the assets, a will made previously will probably cover what is happening today, but a large value change or type of assets change may signal a need for a major revision or simply a tweak of the plan.
Life insurance is an item that is separate and apart from control by a will. Life insurance is a contract between the owner and the insurance company to pay a certain sum of money to a beneficiary upon the owner’s death. Such a transfer at death needs to be taken into account in the overall scheme of what one is doing with their assets at the time of death. Life insurance is purchased frequently at different times in one’s life and the coordination of will and life insurance needs to be maintained or implemented.
Another change that takes place is that of an individual as they age realizing they have a greater need for long-term assisted living care for themselves or a family member that was not taken into account in their former will. Again, it is a matter of coordinating the terms of the will and the types of insurance policies that are purchased, along with the distribution schemes that are available to make sure that assets are available for long-term care if needed.
James M. Rayback is a practicing lawyer with the State College firm of James M. Rayback Inc.