Even if you have a valid will, you may need to draft a new one for a variety of reasons. A will is an essential part of planning for the future. But don’t think creating a will is a one-time proposition. Even if you have a valid document, you may need to draft a new will for a variety of reasons.
Here are seven reasons to update your will:
1. Deaths – If individuals named (as heirs or executors) have died or they become incapacitated, a will should be reviewed to ensure changes are not needed.
2. Assets – Revisions may be needed if the value of assets has increased or decreased significantly, or they are no longer owned. For example, if you specifically leave your home to one of your children, and later sell it, you may want to change the distribution of your other assets.
3. Marriage – Wedding bells usually signal the need to review a will. Which assets should pass to your spouse? Are step-children involved? If this is not spelled out in a will, the state will decide. In a community property state, a spouse automatically inherits half of all community property. In most other states, a spouse may receive one‑third to one‑half of the estate, absent any other directions.
Also, keep in mind that an unmarried couple living together may want to leave assets to each other but in order to make an inheritance happen, it must generally be spelled out in a will.
4. Divorce – In many states, a divorce automatically revokes a will or those provisions concerning an ex‑spouse. As a result, if you get divorced, it’s best to have a new will drafted. For instance, you might have your former spouse removed as a primary beneficiary. In addition, you may want to change the beneficiary of your life insurance, pension or any existing IRAs. Consider the use of a trust if children from a previous marriage are involved.
You may also want to change your will if one of your children gets divorced.
5. Births – Once parents have children, you may want to consider updating your will to include the names of children. Also, you want to name guardians to care for the children in the event the parents die prematurely. (However, the naming of guardians is not binding by the probate court.) Grandparents might wish to draft a new will concerning the distribution of assets after children are born. Again, the use of a trust may be recommended.
6. Retirement – This event may also trigger the need to make changes to an existing will. For example, many retirees sell their homes and move to other states. But state laws can vary widely. Furthermore, individuals may consider a power of attorney that enables someone else to act on their behalf in the event of certain illnesses.
7. Tax law revisions – The Internal Revenue Code is regularly changed. In fact, the estate tax rules have undergone significant changes in recent years and more changes could occur. A will should be reviewed to take advantage of maximum tax benefits that exist today so it may have to be updated if tax laws change.
Note: In some cases, a will might be amended with a “codicil.” However, in many cases, it is best to draft a new will. Your attorney can guide you on how to proceed.
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We feel that having a will, and related powers of attorney and advanced directives, is one of the most important tasks one should complete.
After working hard your entire life to provide for your family, you should not allow the Texas Probate Code and the courts to decide how your assets are distributed.
This article points out the various problems of dying without a will and how these consequences are eliminated with a properly drafted will that disposes of your assets in accordance with your wishes.
1. Name Your Own Beneficiaries in your Will
Problem: When you die without a will, you are considered to die intestate and your property will pass in accordance with the descent and distribution provisions of the Texas Probate Code. Sometimes these individuals are the same you would provide for under your will, but not always.
Benefit: When you die with a will, the beneficiaries named under your will inherit your property exactly as you specify.
2. Reduce the Cost and Time of Probate
Problem: If you die without a will, the cost to probate your estate is substantially higher because of additional requirements, such as filing a determination of heirship with the court to decide the rightful heirs of your estate.
Benefit: This procedure is not necessary when the beneficiaries of your estate are named in your will.
Problem: The probate process is substantially more time consuming if a dependent administration is required in which the court has to approve every action taken by the administrator.
Benefit: An independent executor named in your will administers your estate with minimal court supervision. This allows the probate process to be completed in a timely and cost effective manner.
3. Name Your Own Executors in your Will
Problem: If you die without a will, the court will appoint an administrator of your estate based on the order specified in the Texas Probate Code.
Benefit: If you die with a will, the court will appoint the executor(s) named in your will before considering any other individuals.
4. Extend the Time in Which Beneficiaries Receive the Bulk of Your Estate
Problem: If you have minor children and you die without a will, your children will receive their share of your estate when they reach 18 years of age.
Benefit: With a properly drafted will, a contingent trust can hold your children’s share until they turn an age that is more appropriate for them to receive the bulk of your estate.
The trustee named in your will manages the children’s inheritance until they turn an appropriate age. The trustee may make distributions to your children during the life of the trust for their health, education, maintenance and support.
While the use of a contingent trust is most common when minor children are involved, they work just as well for any individual under a certain age or otherwise incapacitated.
Any beneficiary designations for your life insurance policies or retirement plans should also be coordinated with your will to make sure they are distributed to the children’s trust if they are under a certain age.
5. Eliminate or Reduce Any Estate Tax
Problem: Under current law, if your gross estate, including life insurance and retirement, is under $5.45 million, your estate will typically pass tax-free to your beneficiaries (and a married couple typically can pass up to $10.9 million of their wealth estate tax free).
Benefit: If your gross estate exceeds that number, you should contact an estate planning attorney to learn about estate planning options that can eliminate or substantially reduce any estate tax which would otherwise be payable to the Internal Revenue Service. With a federal estate tax rate as high as 40%, this issue should not be ignored.
Don’t wait…. Do it now…. Make it a priority to protect your loved ones this year!
save $100 on Will Preparation
Offer expires March 31, 2017
While most people realize they should have a will, they still tend to procrastinate over having it done. Most attorneys can have a will prepared within days of the initial meeting, which will alleviate the many problems your loved ones will face if the time is not taken to get your affairs in order.
Our last blog post offered some tips for avoiding family feuds when distributing assets of a family member. It’s important to choose your executor carefully.The executor generally exercises discretion in distributing personal and household items. So it’s important to name a trustworthy person with a fair, impartial, reasonable personality — especially if there are sibling rivalry issues. You want someone who will fulfill your intentions. The right executor can reduce the chance of litigation.
No matter who you name as an executor, the individual will appreciate clear, written instructions.
Here is a “Textbook Example of Headaches, Heartaches and Expense”
Without specific estate instructions concerning asset distribution, family members can be left guessing what a deceased person would want — or decide what to do themselves.
In one case, a Michigan probate court had to step in and resolve bitter disputes by distributing numerous items. The court called it “a textbook example of the headaches, heartaches, and expense that can result from inadequate estate planning.”
Facts of the case: According to court documents, Barbara Waters was divorced and living with Kevin Goethe when she died. She had three children from a previous marriage and he had one son.
Goethe built and furnished the house. When the couple moved in together, they combined household furnishings and purchased items together and individually.
Goethe proposed and purchased an engagement ring but the couple never married. “Ms. Waters was diagnosed with cancer and told Mr. Goethe it would be unfair of her to marry him because of her illness,” according to court documents.
Waters made out a handwritten (holographic) will and signed it “Mom.” Upon review, the court stated the document did not meet the state’s legal requirements and was therefore invalid.
Weeks after Waters’ death, her children moved out of Goethe’s home. He packed some belongings and left them on the front porch for the children to pick up. He was not home when they arrived. The children gained entry to the house through another relative. They removed “almost everything they thought was their mother’s.”
Goethe testified the house was “ransacked.” Family photographs were removed. One photo was ripped in two, with Goethe’s image returned to the frame and Waters’ image taken.
The Probate Court called the children’s actions “offensive.” It then made decisions to divide the items, including:
- A jewelry chest and small kitchenware had to be returned to the estate by Goethe. However, some jewelry items were determined to be gifts from Waters so Goethe got to keep them.
- Photos were ordered returned or duplicated at estate expense.
- A family pet was claimed by both sides. Goethe was awarded the Maltese Terrier “in lieu of compensation for items which either disappeared from his house or items to which he might have had a reasonable claim.”
The judge stated the court could not adopt either “extreme position” — that everything in the house belonged to Goethe or that the children were entitled to anything connected with their mother.
He added: “there is a difference between saying or writing down what you hope will happen and taking the proper legal steps to assure that a court will enforce your intentions.” (Waters, Probate Court for the County of Marquette, No. 10-31879-DE)
This article only provides basic answers to some of the questions involved in the distribution of assets. Consult with your estate planning adviser about your situation. By planning ahead, you can avoid battle lines being drawn after your death over possessions accumulated during your life.
In family law, a central doctrine in cases affecting children is that decisions should be made in the children’s “best interests.” This can include who a child lives with, who has custody, what is the visitation schedule and whether or not a parent’s rights should be terminated.
There is no standard definition of a child’s best interests, but all states, the District of Columbia, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands have laws requiring courts to examine them when making decisions.
According to the U.S. Department of Health and Human Services (HHS), “‘Best Interests’ determinations are generally made by considering a number of factors related to the circumstances of the child and the circumstances and capacity of the child’s potential caregiver(s), with the child’s ultimate safety and well-being as the paramount concern.”
Divorce and family law statutes vary from state to state. Here are some of the common guidelines and factors used by courts to help determine what is in the best interests of a child, according to HHS’ Child Welfare Information Gateway:
- The importance of family integrity and preference for avoiding removal of the child from
his/her home (approximately 24 States, American Samoa, Guam, Puerto Rico, and the U.S. Virgin
- The emotional ties and relationships between the child and his or her parents, siblings, family and household members, or other caregivers (13 States and the District of Columbia).
- The capacity of the parents to provide a safe home and adequate food, clothing, and medical care (eight States).
- The mental and physical health needs of the child (five States and the District of Columbia).
- The mental and physical health of the parents (six States and the District of Columbia).
- The presence of domestic violence in the home (eight States).
- The child’s wishes (Approximately 11 States and the District of Columbia). In these cases, the courts are required to consider the child’s wishes when making a determination. Courts will also consider whether the child is of an age and level of maturity to express a reasonable preference.
Your child’s best interests will be determined under the laws of your state. Consult with one of our attorneys with questions about your situation.
Two ‘Best Interests’ Cases
In one well-publicized, controversial case, a court in Ohio took an 8-year-old boy away from his family and placed him in foster care because he was obese. Caseworkers testified that the mother did not do enough to control the third grader’s weight, which was reported at more than 200 pounds.
The child was returned to his family in May of 2012 after losing approximately 50 pounds. “The best interest of the child has been protected and supported,” the judge stated. “The system worked.”
In another case that went to the U.S. Supreme Court, a Washington grandmother and grandfather petitioned a court for visitation with two daughters of their deceased son. The mother of the children opposed the petition.
A lower court determined that visits with grandparents were in the best interests of the children. However, the Supreme Court disagreed. Forced visitation, the ruling stated, “violated (the mother’s) due process right to make decisions concerning the care, custody, and control of her daughters.” (Troxel v. Granville, No. 99-138, 6/5/00)
(The HHS Child Welfare Information Gateway maintains a state-by-state database covering child-related laws. Click here to access it.)