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Review your will

How Should You Review Your Will?

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Here are some important parts of your estate plan that should be reviewed.

We recommend that you review your will at least every three years. How should you do so, and what else should you also keep in mind when doing a review?

Review your will and related documents many times before they are needed, advises CNBC’s recent article entitled “Be sure to keep your will or estate plan updated. Here are 3 key reasons why.”

Factors to consider that may call for a revision include marriage, divorce, birth, or adoption of a child or grandchild. Significant changes to your asset, like inheritance, lottery win, or significant losses in assets or financial setbacks. Also, moving to another state where estate laws differ from where your will was drawn up means that you should review your will with an experienced estate planning attorney.

About 46% of U.S. adults have a will, according to a 2021 Gallup poll. If you are among those who have a will or full-blown estate plan, here are some things to review and why.

Even though your will is all about you, there are other people you need to rely on to carry out your wishes. This makes it important to review your will to recall who you have named to be executor. He or she must liquidate accounts, ensure your assets go to the proper beneficiaries, pay any debts not discharged (i.e., taxes owed), and sell your home. Do the guardians you have named to care for your children have the contact and capacity to serve?

As part of reviewing your will, along with that document, you may create other documents related to end-of-life issues, such as powers of attorney and health care directives. The person who is given this responsibility for decisions related to your health care is frequently different from whom you would name to handle your financial affairs. You should look at both of those choices.

Even if you have experienced no major life events, those you previously chose to handle certain duties may no longer be your best option.

Remember that some assets pass outside of the will, including retirement accounts like a 401(k) plan, IRAs, and life insurance policies. This means the person named as a beneficiary on those accounts will generally receive the money no matter what your will states. Bank accounts can have beneficiaries listed on a pay-on-death form, which your bank can supply.

If no beneficiary is listed on those non-will items or the named person has already passed away (and there is no contingent beneficiary listed), the assets automatically go into probate. When you review your will, remember to include checking on the primary and secondary beneficiary designations of your life insurance and retirement plans.

Reference: CNBC (Jan. 27, 2022) “Be sure to keep your will or estate plan updated. Here are 3 key reasons why”