UPDATE YOUR ESTATE PLAN OR START OVER?
There are many reasons why you may want to update your estate plan. Maybe you moved, your family dynamics have changed, or your assets have changed. If your life, or the law, has changed since you signed your last will and testament or trust agreement, you need to update your document. You can make updates to a revocable living trust by way of an amendment or a complete restatement of the trust agreement. An amendment updates a specific part of the trust whereas a restatement creates a new set of operating instructions for the entire trust.
If you have a will, you can make small changes or updates with a codicil. A codicil is simply an amendment to a will that must be created, signed, and witnessed in the same manner as the will itself. You also have the option to create a new will with new instructions.
MAKE THE SMALL CHANGES OR START OVER WITH A NEW DOCUMENT?
Imagine a recipe card you have used for years. If you have crossed out and changed one or two ingredients, the card may still be readable. However, if you have altered the ingredients many times, and changed the measurements of everything, the recipe is probably confusing. If your loved ones cannot clearly read your instructions, 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 extensive, your instructions become confusing. The primary reason for the confusion is that the old document and any new documents must be read together to understand the full instructions. When you start to make too many revisions, the documents may not reflect each other well. For this reason, starting over with a new will or a complete restatement may serve you better.
Although codicils and amendments are generally used to make small changes and new wills or restatements are used for large ones, there is no harsh line rule for making changes to your will or trust. A general guideline is that anytime you are making more than two changes, creating a new will or restatement is probably better because it:
● fosters ease of understanding and administration;
● tends to avoid ambiguity;
● reduces the amount of paperwork to retain and provide to interested 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.
In many cases, a restatement may be even more cost-effective than doing multiple amendments. Nowadays, estate planning attorneys have software that allows them to easily and efficiently create new documents.
HAVE QUESTIONS ABOUT UPDATING YOUR ESTATE PLAN? WE HAVE ANSWERS
Before you decide whether to make a small change or create an entirely new will or a trust, it is important to have an attorney review your documents. The experts at DuPont and Blumenstiel can help you determine if your documents need altered at all. We will help make your instructions clear.
Whatever your circumstances, rest assured that we can help you determine the best way to update your will or trust. Call us today at 614-389-9711 and we will help ensure that your instructions are up to date and crystal clear.
To learn more about estate planning, read our Consumer's Guide to Estate Planning in Ohio here.