For your will to effectively reflect your wishes, however, it needs to be up to date. So, when exactly should you update your will?
Here are three instances when you should consider updating your will.
When you create a will, you must designate someone to execute it. This is the person you nominate to carry out your wishes (gather your assets, pay your debts if any, identify your beneficiaries and distribute your assets). If the executor is no longer able to perform this role for whatever reason, it makes sense that you replace them.
Likewise, if you named a guardian for your minor children and circumstances have since changed, you may need to update your will by designating a new guardian.
Assets come and go. If your assets have changed since you last created or updated you will, then you need to give the document another look. Remember, you cannot bequeath what you no longer own. For instance, if you have since transferred some assets to a trust or given them away as gifts, then you need to update your will to exclude these assets.
Just like assets, your beneficiaries can change over time. For instance, if new additions (children and grandchildren) come into the family, you may want to update your will to allot inheritance for them. The same applies if you get married. Likewise, if you lose a beneficiary (through death or divorce), you need to update your will to reflect these changes in circumstances.
A will is one of the most important legal documents you can ever create. Find out how legal counsel can help you create or update your will to reflect your wishes.
]]>While creating the plan might be challenging enough, some also find it just as challenging to have to tell their loved ones about the plan. There’s no rule that says you must do this, but it’s often preferred so everyone knows what to expect.
Talking to loved ones about an estate plan isn’t something that should be done in a rushed manner. It’s typically best to choose a time when nobody has other things going. Find a quiet place so everyone involved can focus. It’s not necessary to talk to everyone at the same time. Some people prefer having one-on-one conversations since estate planning is such a personal matter.
Talking about estate plans will be difficult for some people because of the emotions involved. Always remain compassionate and recognize that people will handle the discussion in their own way. Always be factual about what’s in the estate plan, even if it’s not what the individual wants to hear.
Questions about the estate plan may come up. Be sure to take the time to answer those as well as possible. It’s typically best for heirs and beneficiaries to get those answers from the creator while they can instead of trying to decipher terms after the creator’s death.
Working with someone to get an estate plan together minimizes the risk of it having missing components or unclear information. Remember, a comprehensive estate plan benefits the creator and everyone else involved.
]]>Understanding how an irrevocable trust functions and the protections it offers is essential for anyone considering including one in their estate plan. The decision can significantly affect asset management, tax liabilities and legacy planning.
One of the primary benefits of an irrevocable trust is its ability to protect assets from creditors and legal judgments. Once assets are placed in an irrevocable trust, they are legally owned by the trust.
The separation of ownership means that if legal judgments or claims from creditors against the trustor occur, the assets within the trust are generally beyond their reach. This feature is particularly valuable for individuals in professions with high litigation risks.
Another significant advantage of an irrevocable trust is its potential to reduce estate taxes. Since the assets in an irrevocable trust are no longer considered part of the creator's estate, they are typically not subject to estate taxes upon the trustor's death.
Irrevocable trusts can also play a crucial role in Medicaid planning. By transferring assets to an irrevocable trust, individuals may be able to meet Medicaid’s asset limits. This strategy requires careful planning and timing because Medicaid has a look-back period during which asset transfers can affect eligibility.
Remember, an irrevocable trust is only one option for a comprehensive estate plan. Working with someone who knows your wishes and situation can help you make choices best suited to your circumstances.
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