Mustering family energy and focus to complete an estate plan once is a pretty big deal, right? While doing so is a gift to everyone involved, estate planning is not a “set it and forget it” action. Afterall, lives change, circumstances change and families change. That’s why lawyers remind us it’s important to periodically update—or re-do our plans.
Tweaking or Starting Anew
Changes in the family brought on by births, marriages, special needs, declines in capacity or death may require renewed reflection on estate plans made several years past. Then too, shifts in assets, debt status and market volatility might raise new questions for the estate plan. Even fundamental assumptions related to the availability of the designated executor or trustee sometimes need to be revisited. For example, new job demands, relocations or personal challenges may leave an executor or trustee unable to perform the responsibilities previously agreed upon. All these are examples of why it is important for families to periodically pull out the estate plan and see what might need to be updated—or significantly rethought. How do you know when the will or trust just needs a tweak or two—or, when it would be best to start fresh? Wilson Law Group offers this guidance:
Imagine a recipe card you have used for years. If you have crossed out and replaced one or two ingredients, the card may still be readable. However, if you have altered the ingredients many times, the recipe is probably confusing. If your loved ones cannot read your instructions to determine whether to add a cup of flour or a cup of sugar, your recipe will not work. You have a fifty-fifty chance for a great dish—or a complete disaster. The same can be said about a will or revocable living trust. Making one or two changes to a document is generally acceptable, but when revisions are numerous or comprehensive, your instructions may become confusing. The primary reason for confusion is that the old document and any new documents must be read together to understand the full instructions. For this reason, starting over with a new will or a complete restatement may serve you better.
While there are no firm rules for when it is better to tweak or start fresh on a will or trust, it’s important to focus on ensuring that the end results are clear—to families, beneficiaries—and probate courts. Estate law experts point out that tweaking is not necessarily less time intensive for lawyers then starting fresh—and thanks to modern technology, when we seek legal counsel we are paying for knowledge—not typing. Wilson Law Group suggests that anytime more then two changes are made on a will or trust, it’s better to start fresh (called a “restatement” with trusts), then make codicils or amendments. Starting fresh can be beneficial because it:
- fosters ease of understanding and administration;
- tends to avoid ambiguity;
- reduces the amount of paperwork to retain and provide to financial institutions or parties;
- decreases the risk of misplacement;
- prevents beneficiaries from discovering prior terms; and
- provides an opportunity to include other relevant updates, such as changes in the law.
Affirming The Executor or Trustee
When revisiting the estate plan, it’s important to check back in with the designated fiduciary named to administer the will (aka executor) or trust (aka trustee). Their lives may have changed such that it would be difficult to take on the significant fiduciary responsibilities that come with carrying out these duties. Simmering family conflicts may also be a reason to re-think plans. Professional fiduciaries are a viable option.
Fiduciary bonds are a common requirement for the protection of the estate and its beneficiaries in accordance with applicable state law. Essentially, fiduciary bonds, such as executor bonds and trustee bonds, guarantee the faithful performance of the appointed administrator. As a leading national provider of many types of fiduciary bonds, Colonial Surety makes it easy and efficient to obtain an executor bond or a trustee bond. Just get a quote online, fill out the information, and enter your payment method. Print or e-file the bond from anywhere—even the law office.
Good To Know: Will Vs Trust?
Legal experts at JD Supra note: “The most significant difference between wills and trusts is probate. Probate is the court-monitored process of transferring your assets to your loved ones. If you have a will, your assets will be administered through the probate process. Generally, if you have a trust, your assets will be transferred to your loved ones without probate.” It’s important to keep in mind that probate is not inherently bad—and experts even point out that in some cases, such as situations involving debts or conflicts, probate can be helpful. Probate processes have become more efficient in most states and most even offer expedited procedures depending upon the level of assets involved. While most families will experience the probate process, thoughtful estate planning will enable them to avoid probate litigation.
Family and Estate Law Practice?
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