Ray’s Take Let’s assume you’ve done the right thing and have a will in place. That is a good start, but it’s not enough. You need to regularly review your will to make sure it stays in line with your intentions and the law. Congress continues to kick the can down the road on important income tax and transfer payments, but we now have pretty good guidance on estate tax laws both federally and in Tennessee.
One big area that demands attention would be family changes like a new child or different marital status. Moving to a new state is an important reason to review your will, as laws regarding inheritances and taxes could vary. Owning real estate in multiple states is another good reason to double check things.
Even if nothing changed, it’s good to meet with your family attorney to assure your will still works as intended. Older “formula” tax planning wills particularly need review. Don’t forget that beneficiary designations on retirement plans, insurance and annuity contracts are not covered by your will, and those choices need to be looked at.
Other changes could call for adjustments, too: Realizing newly acquired wealth, anticipated inheritance, the physical or mental incapacity of a relative or other beneficiary, selling or buying a business, grandchildren children coming of age, or your own retirement, adjustments may need to be made. A guardian or trustee choice when your kids are young may not still be the best bet when the kids grow to teens.
You may also have changed your mind, and want to add a newfound relative or eliminate once important bequests. Later in life you may develop a connection to some charity or other organization that you want to support after your death. Pull out your will, see your lawyer and keep things current. Doing this regularly, and after any major change, will go a long way toward avoiding potential problems.
Dana’s Take While reviewing your will, take the time to make changes that might guide your heirs in the disbursal of family treasures. You may have told your oldest daughter she will inherit that diamond pin, but if it isn’t in your will she may not get it. That could cause a family rift.
Ask your heirs if they have any particular interest in any of your possessions. If you agree with their desires, put them in your will. Not only will they be pleased you remembered their interest, it will also help eliminate potential squabbles after you are gone.
Take things a step further and add family history to their inheritance. Tuck notes describing the where, why, when and who of important objects and attach them to their back or bottom. It’s a good way to share family stories and strengthen ties between generations to come.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker.