The Ex Hex: Disinheriting the Estranged
By: Skjold-Barthel
At one time (perhaps five or ten years ago), you may have had an attorney prepare a will, a health care directive, a power of attorney or maybe even a trust on your behalf. But have you reviewed your estate plan within the past year? Your estate plan should be updated whenever a “life-changing” event or a change in the law occurs. If you fail to do so, unintended or unexpected parties may become responsible for different aspects of your estate or worse yet, they may inherit portions, or possibly all, of your estate.
So what are some of those “life-changing” events that may affect your estate planning goals?
- You get married
- You get divorced
- You have a baby or adopt a child
- You have a new grandchild
- You have new stepchildren
- You lose a loved-one such as a spouse or child
- You acquire or dispose of a major asset,
- You retire
- There is a major tax law change (it has happened in 1997, 2001 and 2004)
One of the most common mistakes people with a will or trust make is that they fail to consider how current their estate plan is relative to their situation. For example, imagine that you have an estate plan prepared whereby you designate your spouse to inherit your estate upon your death. Subsequently, you and your spouse divorce. A few years later you pass on leaving your estate plan intact and unchanged. Under this scenario, your ex-spouse could potentially inherit your entire estate simply based on the language in your estate planning documents because you failed to have it amended following your divorce. Generally, in most states a divorce does not automatically void your estate planning documents. The responsibility is left with the individual to make the necessary arrangements to revise your estate planning documents.
In like fashion, if a loved one passes on before you and he or she was intended to administer your estate as your personal representative or trustee, you already should have alternate individual(s) prepared to assume that administrative role. Commonly, spouses provide for each other to administer their individual wills but they may not have considered who would assume that role as an alternate or successor in the event of either simultaneous death or after the first spouse dies. This is an important issue that requires regular, if not annual, consideration based on the factors listed above.
If you decide it is time to make changes to your estate plan, you have two primary options. You can choose to amend your existing will or trust (through a will codicil or trust amendment) or you can choose to revoke your will or trust entirely and have a new will or trust prepared. The first option allows you to make basic changes to your will or trust without having to re-draft a new will or trust. Generally, this option saves both time and money. However, the will codicil and trust amendment must be executed with the same level of formality. In other words, the codicil/amendment must be dated, signed, witnessed and notarized accordingly.
One of the most common misnomers people embrace is that you can simply cross out relevant portions of your will or trust and write in your changes in order to amend a will or trust. However, the law forbids this attempt because it causes confusion as to your actual intent and the resulting effect of your will or trust. That said, it is prudent to consult with a professional if you decide to have your will, trust or any other estate planning document revised.
In the case where your will or trust is significantly out-of-date and many of the provisions need to be revised, you may be better served to have a new will or trust drafted. For example, if you came into a significant amount of money since you.