It is wise to write a will as soon as you acquire a property, get married or have a child, as these significant life milestones will form the basis of the rest of your life.
Why should you write a will?
Making a will is very important because it is the only way to ensure that your estate will be distributed in accordance with your wishes. If you were to pass away without leaving a will, you would be said to have died intestate and your estate would be distributed in accordance with Colorado’s intestacy laws.1
A will can help to prevent disputes from arising after you have passed away. It will protect your assets, provide clarity and reassurance to your loved ones, and ensure that your wishes will be met in your absence.
When should you update your will?
Life is a journey, and along this journey, your assets will change. Your family may grow, you may experience joy, sorrow, wealth and misfortune, and all of these life events will impact your estate. Although it is recommended that you review your will every five years, there are some key milestones at which you should review and amend your will to keep it up to date and relevant. Let’s take a look at each one.
When you move into a new home
Not only will your will need to specify which property you will be leaving as part of your estate, but moving may increase your level of debt, or you may have been fortunate enough to make a profit on the house sale. Either way, moving is a major life change that must be recorded.
When your marital status changes
To provide for your spouse after you are deceased, you should name them as a beneficiary in your will. You should also update your will if you get divorced or remarry as these life changes will affect how you wish your estate to be distributed.
When you have a(nother) child
Many people update their will as they welcome their first child, but it is easy to forget to do so with the arrival of subsequent children. It is essential that your will recognizes all of your children in equal standing in order to ensure that they inherit in accordance with your wishes.
Upon the birth of each grandchild
Likewise, you should amend your will upon the birth of each grandchild if you wish for all grandchildren to be treated equally in your will.
Upon the death of any beneficiary or close family member
You cannot bequeath your estate to somebody who has predeceased you, so if a named beneficiary passes away, you should update your will accordingly.
When you experience a significant change to your personal wealth
You may receive an inheritance, be successful in business, or receive an insurance payout that dramatically increases your personal wealth. Equally, you may suffer financial losses that will change the value or size of your estate, requiring you to amend your will to reflect your current financial situation.
When the law changes
If tax or estate planning laws change, you move into Colorado from another state or wish to leave Colorado to live elsewhere, you should check whether the laws of the state you inhabit impact any clauses in your will and, if necessary, update it to reflect the current legal position.2
If somebody who relies on you needs long-term care
If a parent, partner, spouse or child becomes disabled and will require lifelong care, you may wish to make adequate provision for them in your will.
Don’t forget to revalue your assets
When amending your will, it is easy to add or remove beneficiaries, but one key point that is often overlooked is the value of your estate. House and pension fund values can vary dramatically from one year to the next based on various external factors, so each time you review your will, take some time to consider whether your assets have increased or decreased in value and make any necessary changes to reflect these changes.
Assets that need to be valued will include property, business interests, bank accounts, savings accounts, pension funds, life insurance policies, stocks and shares, vehicles, and valuable personal belongings.
You should also accurately record your debts at each will update. These will include outstanding mortgage balances, any overdrafts or loans, and any balance that you have on credit or store cards.
How do you change your will?
You should enlist the services of a family law attorney who is experienced in all aspects of estate planning. In addition to ensuring that your will is legally binding, they will be able to advise you on inheritance tax planning and store your will safely for you.
To start your estate planning journey, contact Lewis & Matthews, P.C. today.
