Sunday, January 13, 2008

How to Know When to Update a Will


A will is a very important document that helps your survivors divide your belongings after you die. Many people prepare a will, but forget to update it after life-changing events occur. Updating your will ensures all your wishes, assets and survivors are current. Following are steps to help you know when it is time to update your will.


Difficulty: Easy



Step One

Add your new spouse to your will immediately following your wedding. Subsequent weddings of your children also should trigger an update as you may want to include your son or daughter-in-law in your will.

Step Two

Include a new child in your will as soon as he is born or as soon as an adoption is final. This includes both your own children and your grandchildren.

Step Three

Redistribute your assets to people in your will when there is a death in the family. This could mean moving the assets earmarked for the person who died and redistributing them to those still living who are in your will. It could also mean adding monies being distributed to everyone in your will should someone die and leave you a large inheritance. This new money in your life needs to be included in your will.

Step Four

Account for financial changes in your life. A person makes different amounts of money over his lifetime, so you will need to change your will when you have more to give away. Don't forget that your situation may change the other way--a bankruptcy, for instance--when you may lose things listed in a will. If these are large ticket items, update the will.

Step Five

Refresh a will that is over five years old to account for your ever-changing life. Get into this habit by establishing a five-year timeline for updating your will. This ensures when you die, you aren't leaving a 30-year-old outdated will.

Step Six

Update a will when the tax law changes as laws often effect your will disposition. Laws governing the amount of money you can give away tax-free each year changes frequently. These tax breaks could also come to an end in the future. Be ready to update your will as soon as any laws change.

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