Tax Season Round Up: Should you update your will?

Maybe you hate tax season…maybe you love it? We don’t judge but either way, the season has arrived and you’re probably busy gathering documents from the past year. Putting aside cataloguing receipts and calculating expenses in hopes of a decent refund, your W2 is not the only document in need of a year-end check up. Often overlooked, that estate plan of yours might benefit from a refresh.

So Why Update Your Will?

You know those persistent phone notifications that ask you to update to the latest operating system? They may be an annoyance, but without them, literally none of the apps on your phone would work! Like your phone or computer software, your will needs periodic updates to ensure things remain current and are functioning properly. And like those pesky software updates, if you keep on clicking “maybe later”, you could end up with an estate plan that no longer works for your present life. If you’ve experienced any significant changes in your personal or financial life in the past year, consider those your update notifications it’s best to go through your plan and see if anything needs to be refreshed.

Maybe your long lost great-aunt Mary passed away and left you a bunch of Amazon stock (hey, one can dream…), or you finally sprung for that vacation home in Bali (still dreaming!). Or maybe you just decided to upgrade your Kia Sorrento to a Honda Odyssey. Whatever the case, if you don’t update your will and designate who that property should go to in the event of your passing, your residuary beneficiary could end up getting an unintended windfall.

And even if you haven’t gone through any big changes, estate professionals still recommend reviewing and updating your will every 3 to 5 years for good measure.

When You Need to Update Your Will

Still not sure if you’re due for an update? Below are a few life events that might necessitate an updated will:

  • You’ve gotten married (🎉🎉🎉) or divorced (…🎉?).
  • You’ve become a parent 👪(whether by birth or adoption) or grandparent 👵👴.
  • You’ve moved to another country or state 🛫🏠.
  • Your children have reached the age of 18 and no longer need a guardian 👌(😭).
  • A beneficiary, executor, or guardian has passed away 😨.
  • There have been significant changes in the value of your estate or the type of property that you hold (e.g. you’ve sold a house, received a large inheritance, or have moved property into a trust) 💰.
  • Your executor (or guardian) moves away and/or is no longer willing to serve 👎.
  • You’d like to amend or eliminate the gifts that you’ve left to certain beneficiaries 🎁.
  • There’s a change in state or federal tax law that could affect your estate ⚖.

How to Update Your Will

So you’ve decided that you need an update, now what? It’s easy. You can either:

1) Draft a codicil with the changes you have in mind. You’ll need to execute the document in the same way as a will (usually by signing and dating before witnesses or a notary public), and then store the codicil attached to or in the same place as your will. After your death, the two documents will be read and interpreted alongside each other*.

*Note: if your codicil is found invalid for any reason (e.g. if it wasn’t signed or was executed improperly), the provisions of your original document will still continue to remain valid.

2) Create a new will. If you use will-generating software or online forms, it can be easier to create a new will to replace your old one rather than draft a codicil. Some estate attorneys also recommend creating a new will over drafting a codicil, since a new document reduces the chances of any confusion or potentially conflicting provisions between a codicil and the original will. (If you take this route, don’t forget to destroy any old copies of your will that you might having laying around, so that it’s clear which document is current.) You can create a new will, or edit your existing one, in just a few minutes through the Qwill app!

So that’s it folks! When going through your year-end in review, don’t forget to consider your estate plan.

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