A will is a legal document outlining how a person’s assets and property will be distributed after death. While discussing the final wishes of a loved one (or ourselves) can feel morbid, wills are a crucial tool in any financial life planning and will ensure a person’s final wishes are respected.

Taking the time to thoughtfully craft a will guarantees that loved ones are cared for and assets are protected for future generations. However, many people are unaware that wills should be updated regularly to reflect life changes and updates to local laws and regulations related to estate planning.

An Essential Document for Financial Life Planning

A will is a basic wealth management tool and is critical to a seamless property transition after death. As a legally binding document, a will secures your assets and certifies that they are allocated per your preferences. Establishing these appointments early on can prevent conflicts among family members or beneficiaries. Additionally, a will allows you to appoint a guardian for your underage children, specify funeral arrangements, and designate an executor to oversee the management of your holdings.

Drafting a will is a proactive measure designed to secure your wealth and ensure federal and state laws are followed. A well-designed will can also prevent additional expenses, fines and delays, and help make a difficult time in a family’s life easier.

Can Wills Be Changed?

The short answer is yes. A will should evolve, just as we do. Life circumstances can change significantly over time, and major life events such as marriage, divorce, the birth of a child, or a cross-country move can affect our financial state.

Similarly, a substantial increase in assets or changes in tax laws should trigger a financial review and an update to your will. While housing prices and property values continue to fluctuate, as noted by Reuters, these changes should be reflected in your will. Have you recently sold a property? Have you remortgaged a home? Or perhaps you’ve added significant holdings to your real estate portfolio. All of these changes should be noted when you update your will so you can be prepared for anything unexpected.

We believe that you should consider updating your will when an executor or trustee is no longer the appropriate choice. For those with substantial assets, choosing an executor with the knowledge and experience to distribute and monitor the estate correctly is crucial. For instance, changes to an executor’s health or location could mean it’s time to reconsider their appointment.

One common mistake in estate planning is neglecting to update the beneficiary designations for retirement plans since the beneficiary isn’t always determined by the will or trust (as specified by the IRS). These forms are often not reviewed for a decade or longer, and it’s important to update them, especially if the value of your account has significantly increased.

How Long Should You Keep Your Most Current Will?

We believe in revisiting your will and other essential financial planning documents every 3-5 years. Reviewing your estate plan regularly will ensure it reflects your intentions and guarantees the appropriate safeguarding and distribution of your assets.

Not having a will poses a risk as your assets subject to probate would be distributed according to state law instead of your desired beneficiaries, including individuals or charities you would like named in your will.

Understanding the financial implications of choosing a beneficiary, or dividing assets among heirs, is a necessary aspect of creating generational capital. However, keeping a will updated doesn’t have to be a Sisyphean task, especially if you have the right wealth management team by your side.

If you’re looking to make informed decisions regarding your financial future, please contact us at Pekin Hardy Strauss.

This article is prepared by Pekin Hardy Strauss, Inc. (“Pekin Hardy”, dba Pekin Hardy Strauss Wealth Management) for informational purposes only and is not intended as an offer or solicitation for business. The information and data in this article does not constitute legal, tax, accounting, investment or other professional advice. The views expressed are those of the author(s) as of the date of publication and are subject to change. Pekin Hardy cannot assure that the strategies discussed herein will outperform any other strategy in the future, there are no assurances that any predicted results will actually occur.