WHEN TO UPDATE YOUR ESTATE PLAN 

As an estate planning attorney, I review lots of existing Wills and Trusts. Many of these documents were done years ago – and many of them still reflect the wishes of the client.

However, there are times when I get a call that goes something like this: “I think I need my Will/Trust changed. I just looked at it and it is not what I want anymore. I am going to [fill in exotic location] and I need it changed before I get on the plane.”

Documents done years before may have been perfect for the circumstances at that time. But, circumstances change: personal relationships evolve; assets may increase, so tax planning may be an issue not addressed in the prior documents; charitable bequests may be more important; or special needs planning for an heir may now be a necessary part of the plan.

Here are a few suggestions on when it may be time to have you documents changed – or at least reviewed:

1. You did not have children when your documents were prepared.
2. The executor or trustee you named is now over 70 years old.
3. A beneficiary named in your documents has – or may have – a disability.
4. A beneficiary named in your documents is in a nursing home.
5. You want to give specific personal property to specific people.

Many attorneys will be more than happy to review your documents to see if changes are really necessary. It may be that you existing documents are perfectly fine, but if not, better to start the updating process now than wait until the day before your scheduled flight.

Additional Reading:

When To Change Your Will

Five Reasons Baby Boomer Need To Review Estate Plans – And It’s Not About Taxes

TopRetirements.com released its 2012 list of the “Worst States to Retire.” It will probably come as no surprise to those of us that live here that Massachusetts finished fifth on the list – behind Connecticut, Illinois, Rhode Island, and Vermont. Among the reasons that Massachusetts made the list were high property taxes and the high cost of living. In the 2011 report, Massachusetts finished 8th.

Surprisingly – at least to me – was that Vermont finished in the fourth spot. In addition to the climate, the article cited very high property and income taxes as the reason. Only five factors were use to compile the list: fiscal health, property taxes, income taxes, cost of living, and climate. If those factors are not important to you, TopRetirement offers a site where you can customize your report.

The article acknowledged that there may be more important factors to people contemplating retirement: proximity to family and friends, social services, and the quality of medical care.

Additional Information:

• Worst Regions and Cities for Natural Disasters
• 100 Most Popular Places to Retire (2011)

Can I just do a codicil or is an entire new will necessary? That is a question I am frequently asked. The answer is: it depends. Although that sounds like a non-answer, the truth is: it really does depend.

A codicil is a document that revises existing will terms, revokes sections of a will, or adds to the existing will. Once signed – and a codicil must be signed with the same formalities as a will - the codicil and will become one document. The codicil does not replace the will, it is added to the underlying will and both become the legal direction for the estate. A codicil restates the sections of the original will that have not be changed by the codicil – and therein lies the problem.

Because both the codicil and will are now the legal document, there is always the danger that some of the terms may be inconsistent. Unless the lawyer has also prepared the original will, they may be reluctant to prepare a codicil for the will. Even if they have prepared the will, most lawyers will encourage the client to simply start fresh with an entire new will. The danger of having inconsistent clauses, upsetting heirs, inaccurate or unintended bequests, outweighs the cost of doing a new will. Connecticut Junior Republic v. Doherty, 20 Mass. App. Ct. 107 (1985) (charitable beneficiaries possibly mistakenly replaced in second codicil were not entitled to recover since testator had read the codicil).

Only if the changes are very minor.

- Change in Distribution Plan. The distribution of an estate is the very reason the will was done. When the distribution plan changes, a new will should be drafted. Once signed, the old will should be destroyed. Copies of the old will – if any – should also be destroyed. For this very reason, copies of a will should not be given to anyone. Clients change their minds, family dynamics change, and personal relationships may improve or deteriorate. If an heir has an expectation of an inheritance, based on a copy of an old will they have in their file, there will likely be a challenge to any new will that eliminates or reduces their expected share.

- More than One Codicil. If a first codicil has already been done, and more changes are needed, an entire new will should be done. Having two or three codicils that change specific parts of a will makes the probate process more complicated. It is also difficult to keep track of so many papers. Submitting a will to the Probate Court with a document labeled “Second Codicil,” is naturally going to lead to the question: “Where is the First Codicil?” If it cannot be located, the executor will have to seek instruction from the Court on how to proceed.

- Change in Executors. It may be that a change in executor can be done using a codicil. If the primary executor has passed away, or no longer wants the job, a codicil may be sufficient. On the other hand, some heirs look at being appointed executor as a sign of approval, and may not appreciate being replaced by a sibling. Further, an executor may be compensated for doing the job, and may feel it is their right to be appointed and paid. If that is the case, a new will should be done.

In almost every case, I feel a new will is the better way to go. A will is the document left behind that details the distribution of your estate. The wishes expressed should be clear, consistent, and hard to contest. Trying to use a codicil to alter such an important document can cause significant confusion and may lead to expensive probate litigation.