Almost every person I meet asks me how often they should review, update, or revisit their will. I am happy to answer this question, explaining as follows:
“You should update your will every few years, or whenever you have a major life change.”
Please read the following sentences in as sarcastic of a voice as you can:
I know this is quite the definitive statement, and leaves nothing open for interpretation. Certainly the phrase “every few years” is absolutely definitive, and cannot be misinterpreted.
Back to normal now, sarcasm is done:
What do You Mean by, “Every Few Years?”
Of course, every few years can be defined as anywhere from 3 – 7 years, or (even more circularly) within a few years on either side of that range. There is no single answer. The reason for every few years review is that laws change, circumstances change, and how your life looks changes. If you have your will reviewed every few years, then you are likely to keep up on these changes, so that your estate plan stays current. That pretty well covers “every few years.”
What are “Major Life Changes” and How Can I Know When I Have One?
If you are wondering what major life changes mean, here is a partial list (as an exhaustive list would not be possible):
Should You Update Your Will When You Start Working? (or change jobs, maybe? See #9 below)
– This one seems a bit strange, as most people don’t have a will, or estate plan before they start working and making money. But, when you change jobs, then you probably want to revisit your will and estate plan. Changing jobs can involve new retirement accounts and other changes to your financial situation. This is a great time to review and update your will.
– This one seems obvious. When you get married, you probably want to include your spouse in your will. The other direction also may seem obvious, but I am consistently surprised by the number of people I meet who have their former spouse listed as a beneficiary on a life insurance, retirement account, or other asset. Certainly maintaining life insurance to pay out to a former spouse may be part of a divorce agreement, but most people don’t want their former spouse to inherit assets upon death. If you get remarried, then you set up a whole new set of circumstances. You will have two families to blend, and decide how to address asset distribution. You may have step children, and need to consider those issues. Getting remarried is a time to update your will.
Should You Update Your Will When You Have Children?
– Obvious, again, but still important. When I had my first child I noticed that I seemed to understand being less selfish and understood the responsibility of caring for my child. Just like I realized that I wanted the best for my child, I am sure you would agree. When you have a child, you want to determine who will raise the child if you are gone, and how you will provide for them (life insurance, anyone?). So, that is a great time to review and update your will.
Should You Update Your Will When You Have Step Children?
– If you get remarried, or are remarried, and you have step children, you should update your will. Some people treat their step children the same as their own biological children. Others treat step children differently. Many times, if someone remarries later in life, and their children are mostly grown, as are their step children, they want to keep assets separate. This is a great time to update a will and account for the new life circumstances.
Should You Update Your Will When You Buy a House?
– When you buy a house, you suddenly have a major asset, and almost always, a major liability in the form of a home loan. You will want to set up a plan of what happens to your family if you pass away and the house is still not fully paid off. How to address this situation involves reviewing and updating your will.
Should You Update Your Will When You Move?
– If you move, you may need to update your will, but you also may not need to update your will. If you move within a state, the same laws apply, and you may not need to update your will. If you move across state lines, your will is still valid, but it may be a good idea to review your will to see if everything still works in the new state. The specifics of a will can also matter. Some wills specifically name a piece of property, and that may need to be changed if you move. Overall, when you move, there are probably some other life circumstances changing, so updating your will may be a good idea to address all the changes, not just moving.
Should You Update Your Will When Buy a Really Nice Car?
– This is kind of like buying a house, but if you buy a really nice car, you want to know what will happen to it if you pass away, and who will get the car. People get really into cars, and the more you can avoid fights about a really nice car, the better. Plus, really nice cars are just fun to drive, right?
Should You Update Your Will When You Buy a Motorcycle?
– Some people will say this is a really dumb thing to do, while others will find it awesome. My father-in-law loves to ride his Harley motorcycle and does so more now that his kids are grown and out of the house. Meanwhile my doctor brother-in-law refuses to ride them. Every time I see a bumper sticker that says, “Look Twice, Save a Life,” relating to motorcycles, I laugh to myself. I know motorcycles can be dangerous in traffic, and I am not trying to say they will lead to death, but even if the occasion to buy a motorcycle is a happy one…it’s still a good time to review and update your will.
Should You Update Your Will When You Decide to Take Up Skydiving or Some Other Dangerous Hobby?
– This is also a good time to make sure you have adequate life insurance. I have a friend who was learning to skydive and use one of those wingsuit things, when his parachute failed to open, and then his reserve parachute also failed. Eventually they both opened and slowed him down, but the parachutes tangled and he fell out of the sky from several hundred feet up. He escaped with only a broken vertebrae in his back, but it could have been much worse. If you are an adrenaline junkie, it is good to have your will up to date.
Should You Update Your Will When Your Kids Graduate from College?
– Once your kids are grown, your life will look different. You may find yourself with grandchildren, and perhaps you now want to care for the grandchildren and provide for them through a will, instead of just your kids. Perhaps your children are moving home and you want to encourage them to move out as soon as possible. Perhaps you want to teach your children and grandchildren the value of money and have that lesson continue after you are gone. Perhaps you are not ready to give money outright to grandchildren, or you want to provide for the grandchildren through an educational trust. There are a lot of different situations that might arise. You will definitely want to review your will at this point, to make sure your wishes and desires are up to date.
Should You Update Your Will When You Change Jobs?
– Changing jobs can involve new retirement accounts and other changes to your financial situation. The change can also involve a change in living arrangements, income, expenses, and the like. Certainly this is a good time to review your will.
Should You Update Your Will When You Start or Sell Your Business?
– Starting a business can be new, exciting, and frightening, all at the same time. You are probably most concerned with getting your business up and running, but at the same time, you will want to know what happens to the business if you are no longer there. While you are running the business, you want to have a business succession plan, so that you can know how you will get out. When that time comes, you really want to have a plan in place, one that allows you to get the money you need out of your business, while still being able to leave the business behind, as much, or as little as you want. Selling a business, or getting out of a business can be difficult because of the amount of time and effort put into the business. You want your will and estate plan to reflect where you are with your business, no matter what the circumstances.
Should You Update Your Will When You Retire?
– Retirement marks a significant shift in life. You go from working, saving, and accumulating assets while you were working to spending the accumulated assets during retirement. This shift presents many significant challenges. You begin to wonder if your money will last the rest of your life. You wonder what you will do now that you are no longer working, and you wonder how you could be so busy without needing to go to work! (or so my clients tell me!) All of this shifting in your life demands a review of your will and updates as necessary. Your will changes to reflect your current life circumstances.
Should You Update Your Will When You Need Long Term Care, or Think You Might Soon?
– This relates to your concern about how much money you have, and whether that money will last. If you have been diagnosed with some sort of condition that will result in long term care, and long term care costs, or something catastrophic happens, you want to be in the best position possible. You will need to pay for the care somehow, whether that includes long term care insurance, Medicaid, private payment for the costs, or including family members in the solution. While you want to plan ahead for long term care costs as much as possible, and certainly that plan should be reflected in your will, there are planning options available even in a crisis type of situation. You want to move as quickly as you can to address these types of situations in your will. This is necessary time to update your will, and put things in order.
Not Every Situation is Covered Here
At the risk of repeating myself, this is not a complete and comprehensive list. Rather, this is a list of common life changes when a will review and update may be a good idea. There are many other life changes and circumstances that may come up. If you have had any of the changes above, or just want to review and update you will, you can schedule an appointment by going here.