When Is It Time to Revise Your Will or Trust?

Couple relaxing on bed in their new home

When completing a Will or Trust, oftentimes people believe it will never need to be changed. But typically, life is filled with changing circumstances, and it is important to revise your Will or Trust following major changes in your life.

There are several major changes in your life which should prompt you to update or revise your Will or Trust:

Revise Your Will or Trust When You Get Married (or Remarried)

If you are getting married, you should include your new spouse in your Will so you are in control of how your estate passes at your death. You should consider whether you want to hold any of your property owned prior to marriage as your separate property.

If you are remarrying it is important to know in New Mexico, and any community property state, the property you bring into the marriage is your separate property. You should consider if you want to keep your property separate, so at your death you can direct its disposition. It is important to consider the effects of community property. Whatever your decision is, you will need to update your Will to make certain your wishes are known when you die.

Take a Look at Your Will or Trust After Divorce

While going through a divorce is a difficult time, it’s an important life event that should lead you to reconsider your Will or Trust. After a Final Decree of Dissolution of Marriage has been entered, the parties of the divorce must carry out the terms in the Marital Settlement Agreement (MSA). This may include dividing the assets accumulated during the marriage.

It is important to revise your Will after a divorce to accurately depict the assets you currently hold, remove your ex-spouse if they are named in an important role in your estate plan (such as personal representative), and ensure your most up-to-date final wishes are depicted in your documents.

The Death of a Family Member Can Affect Your Will or Trust

There are many ways that a death in your family can affect your Will or Trust. If your spouse passes away, or one of your children, or a family member who is named in an important role in your estate plan (such as guardian for your minor children), you should consider updating your estate plan to address the new circumstances.

Reassess Your Will or Trust When a Family Member’s Health or Disability Status Changes

Your Will or Trust can also be affected by the health or disability of a family member. If your spouse or another family member receives a major medical diagnosis, such as dementia or cancer, it may be appropriate to update your estate plan to address the new circumstances.

Similarly, if your spouse or a child of yours becomes disabled and receives governmental benefits, you should consider updating your estate plan and/or creating a special needs trust to ensure the assets you leave them does not eliminate their governmental benefits.

Does Your Will or Trust Need Updating After a Change in Assets?

If, through hard work, good fortune, or an inheritance, your assets have increased substantially since you originally prepared your estate plan, or you have fallen on hard times, it is most likely appropriate to consider revising your estate plan to make certain your distribution of assets is still what you want and you have the proper language to protect your assets from estate taxes. If you inherited assets, you may want to consider updating your estate plan to provide exactly how those inherited assets will pass at your death. Some people want to make sure they stay in the family, and others may want to give some of those funds or assets to charities.

Stay Abreast of Estate Tax Laws for Changes and Revise Your Will or Trust Accordingly

The United States estate tax laws have changed many times since first enacted in 1916. You should stay aware of estate tax law changes, and if you think your estate may be affected by estate taxes, it is time to revise your Will or Trust to protect your family. Currently, the estate tax rate is 40%.

There may be additional circumstances in which you would want to consider updating or revising your Will not discussed in this blog post. Take the time to review your Will or Trust at least once a year to determine if updates are necessary.

If you have questions regarding your estate planning document, contact an estate planning attorney or call Pregenzer, Baysinger, Wideman & Sale, PC at 505-872-0505 to schedule an appointment.