Periodic reviews—you understand the need for them at your job or planning for retirement, but many folks may not realize how important a timely review of their estate planning really is.
If you prepared a will 10 or 20 years ago, you took an important step in deciding who would care for your minor children and who will inherit your personal property upon your death. That will is most likely still a valid will, and there’s probably no need to redo it just because your children have now grown up. But to determine if it’s still good enough, have your needs and goals changed at all in 10 or 20 years? Has your family grown to include a new spouse, step-children, or grandchildren for whom you want to make provision? Did you start a business whose status is not addressed in your current will, or do you want to leave a gift to your church, university, or a charity? Do you need to revisit the beneficiary appointments on your life insurance policies, investments, or financial accounts? These are all realistic examples of possible revisions you should consider even if you already have a will in place.
Under Tennessee law, if Eddie divorces Valerie and fails to update his will before passing away, a court would generally invalidate any gift in his estate left to her. The legislature assumes that individuals do not really want to leave their property to ex-spouses, who may have already received a substantial portion of their property in a divorce settlement (wouldn’t that be the best of both worlds for her!). But just because this “revocation-on-divorce” statute may help folks who neglect to update their wills following a divorce, all laws are not created equally. If Eddie fails to update his life insurance beneficiary designation that left a $5 million policy to Valerie, this law will not help him, and the ex-wife would likely receive the insurance money. When push comes to shove, Tennessee, like most states, will not revoke such nonprobate transfers, even though Eddie has remarried, now with new wife Janie. In this example, Valerie would still be awarded Eddie’s life insurance proceeds but would receive nothing under Eddie’s outdated will. Second wife Janie might be eligible to inherit something under the will (depending on Tennessee’s laws of intestacy, how the will was drafted, what assets and debts are in Eddie’s estate, etc.), but the whole mess could have been avoided had Eddie made a periodic review of his estate planning, either after he divorced Valerie or when he married Janie. Just a Fair Warning… (And now of course, Janie’s cryin’!)
If you need to draft or update your will, or even if you just have estate planning questions, procrastinating could do your family, heirs, and interests a real disservice. Don’t delay. A minimal amount of work and planning now could spare your spouse and children years of headaches and grief down the road. Contact me right now for a thorough estate planning review. I’ll wait…