{Read in 8 minutes} A lot of people are fascinated with the concept of keeping certain things current. For example, I’m sure we all know people who want the latest edition smartphone or must have those new designer shoes every season. Maybe you know someone who goes through spouses like Kleenex. However, in a surprise to absolutely nobody, people aren’t necessarily beating down my door every season to find out what’s new in the land of Wills, or whether or not they should update their documents.
Why is that? Because when clients sign estate planning documents, they intend to make use of them for quite a while — basically until there’s a change in circumstances such as the passing of a beneficiary, the acquiring of new assets, the end of a relationship or friendship, or children who were formerly minors coming of age, there is no need.
Sometimes if people have overheard other people talking about probate, either in a positive or negative way, they might come in to ask an opinion about revising their Wills. They might even come in wanting a Revocable Trust or estate tax planning. However, this is the exception and not the rule.
On the same front, people will often come into my office and say, “I have a Will but it is (10, 15, 20, or 30) years old, so I need to redo it.” Just because a Will is old does not mean that it is no longer valid. Unlike a fresh loaf of bread or a quart of milk (or anything else you don’t want to leave around on the counter for too long), a Will does not go bad, stale, or expire in any way. As long as the document still reflects your wishes, it is perfectly acceptable and the Court would have no issue admitting it to probate. If you’d like a helpful checklist to determine if your Will still reflects your wishes, I provide one in a previous entry of this blog.
What is important is that every four or five years, a client takes their Will out of the drawer, looks at it, and asks themself the question, “Does this still reflect my wishes?” A previous article addresses some of the things that you need to look at to help you determine if your Will still fully reflects your needs.
But what about the other legal documents? Is the same true for a Power of Attorney or Health Care Proxy? Or a Living Will? Is it important to update those as well? And what about those beneficiary designation forms on retirement accounts and life insurance policies? Should people review and update them periodically just for the sake of doing so?
The answer is yes — people should absolutely review these documents every four or five years just like Wills. However it’s not necessary to update them if they still reflect your wishes. Some things you can look at for these documents:
Power of Attorney
By way of review, the Power of Attorney is a document that one can sign to appoint someone to make financial decisions for him/her. So, what sort of things are helpful to look at? First, take a look at the names of the Agents and any Successor Agents that you have named. Are you still comfortable with these people handling your affairs?
Is one of those Agents an ex? Whether it’s an ex-spouse, lover, or friend you might not want them having access to your checking account anymore. If you’ve deleted their number from your phone, they probably should not appear in your legal documents. Time to update that.
If a person’s name has changed because of a marriage or a divorce, or just a legal name change of any kind, or if they have moved to a new address other than the one listed in the document, it might be important to update the documents. However, banks will often work with people so a quick trip to have your attorney re-draft the form is unnecessary. Change these when making other changes to legal documents.
Finally, take a look at how old the form is. In 2009 and again in 2010, New York State substantially overhauled the Power of Attorney statute and created a new statutory short form to ease bank acceptance of these documents. If the form is dated before 2009 and your goal is to ensure that the bank seamlessly deals with your Agent and accepts the form, you may want to consider updating the Power of Attorney.
Health Care Proxy and Living Will
For the Health Care Proxy, which names agents, the same considerations as above apply. Make sure the people who you want to make these decisions are listed in the document and that names, addresses and telephone numbers are current.
Also, question whether or not there are people that you left off the existing document because they were not yet ready to serve. For example, if I signed a Health Care Proxy when my now adult daughter was 15 years old, and she’s now 30 or 40, it may be a good idea to update it to make her the primary Agent to make medical decisions for me — which I would not and could not have done prior to her attaining the age of majority.
For the Living Will, it’s very important that you take a look and make sure it still reflects your wishes concerning artificial or heroic measures to extend your life. Equally important: have the uncomfortable conversation with your Agent and Successor Agent on the Health Care Proxy about what your wishes are concerning artificial or heroic measures to keep you alive. These are the people who are going to be making these decisions. Having this conversation now will allow them to be sure that they are following your wishes, which will give them an added level of comfort.
Beneficiary Designation Forms
Again, you want to make sure that everyone’s name, address, and telephone number are correct. If you have named your children as the beneficiaries, make sure that you have named all of your children. For example, I may have taken out a life insurance policy when I had my first child, but now I have three or four children — yet never bothered to update the form to include them. Fortunately, many companies now have boxes you can check to include all of the children who survive you, instead of naming them individually.
Make sure none of the beneficiaries are people who are now deceased or people who you would not want to leave money to outright because they are on needs-based government entitlement programs, such as Medicaid or SSI.
Finally, make sure again, if you have gotten divorced or broken up, that you are not leaving your ex as a beneficiary.
In conclusion: estate planning documents generally don’t go stale nor do they expire. However, it is important that a client take them out of the filing cabinet once every four or five years and make sure that the documents reflect their current wishes with respect to the points I raised in this article. For more information on this topic, please contact me at (212) 495-0317 or by clicking here.