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Useless Estate Planning? 5 Things to Know So Your Estate Planning Doesn’t Become Useless

 

Our firm does a lot of estate planning. Our clients are encouraged to come back and update their plan periodically, especially if there have been changes in their lives. Once the family has created their estate plan and done the work, we don’t want to see them have a plan that’s outdated and does not function as intended.

Is having an out-of-date will better than having no will at all? Estate plans do not have expiration dates, but changes to state laws or changes to the families circumstances can render the plan ineffective. When this happens, having an out-of-date will may have the same effect as having no estate plan at all. It is important to review your will periodically to ensure it still does what you want. It may also lead to litigation if the beneficiaries don’t agree on how to handle the situation.

What can make your estate plan out of date?

The estate beneficiaries have died. For example, you left your estate to your two siblings but they both died before you and you never updated the beneficiary designations. If your beneficiaries die before you, your will is still technically valid. However, it will have no effect on who will inherit from your estate because you didn’t provide direction. Instead, your estate will be distributed as if you had died with no will at all. 

You have new beneficiaries. If you got married or had more children after you drafted your estate plan, the plan will be only partially helpful. Arizona has statutes that protect spouses and children that come after a estate plan is written. As a result, it may be that Arizona law will determine where your estate is going, not you.

The Personal Representative is deceased or unable to serve. The personal representative is the person nominated in your will who administers the estate and distributes the property. If the person you named as the personal  representative is unable to serve, the court will have to appoint someone else. Your estate beneficiaries may have a say in who is chosen, but you will have lost the ability to choose.

The property identified in the estate plan is no longer owned by you. Let’s say your intent was to divide up your estate equally by giving cash to your daughter and a home of equal value to your son. If the home is sold before you die, your son will receive nothing. Your estate won’t be divided 50/50, rather it will be inherited 100% by your daughter. Is this what you wanted?

The law changes. If your estate plan was designed specifically to avoid estate taxes or to take advantage of certain tax benefits and the laws change, your plan may no longer serve its purpose. This is why it is important to check in with your estate planning attorney.


What can you do now? Well, you did most of the work when you made your estate plan, now you just have to do the maintenance. Let us know if we can help you keep your estate plan up to date.

Written by: Jennifer Kupiszewski, Esq.


The lawyer disclaimer: We hope you find this informative, but it is not legal advice. You should consult your own attorney, who can review your specific situation and account for variations in state law and local practices. Laws and regulations are constantly changing, so the longer it has been since this was written, the greater the likelihood that the information might be out of date.



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