A Cautionary Tale About Updating Your Will

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If you already have a last will and testament, congratulations! You've taken the first step in creating a complete estate plan. While that will is important, it's equally important to revisit it every year to ensure that it still addresses the financial concerns you might have. Life is ever-changing and so are the circumstances that might prompt a need to make a change in your will. Read on to learn more.

When Property Disappears

It's easy to assume what might happen when the property mentioned in a will is no longer present. You might just think that when the deceased's will is read, any missing property is replaced by other property or that the beneficiary inherits nothing. In actuality, the way the missing property is dealt with depends on the wording of the will and the type of property it is.

Blanket Wills

The simplest wills divide the entire estate up into percentages. If you wish to leave your two adult children with the estate, this manner of doing so can mean that half of the estate goes to one child and half goes to the other child. The property is usually treated as follows:

1. The estate is valued using appraisers and an inventory.
2. A portion is assigned according to the will.
3. Liquid assets and hard assets are valued together.
4. Hard assets (like real estate, vehicles, boats, etc.) are sometimes sold to make things fair and even.

If an item is missing from the estate, the beneficiaries can take no action. The missing item (such as a vehicle that was sold) is ignored; only the present value of the estate is considered.

Single-Asset Beneficiaries

Another more detailed method of creating a will allows the benefactor to assign a certain property to certain people. The benefactor, for instance, might specify that a daughter is to receive certain pieces of jewelry. When property is found to be missing using this type of will, it can only be adeemed (or paid back) if the property is in the form of cash. If the property is an item like a silver set, it cannot be adeemed and the beneficiary misses the opportunity to inherit it.

Cash Assets

Estates are comprised of items like homes, cars, furnishing, pets, and more. Estates also include things like bank accounts and investment funds. The law views items and cash separately. If money is missing from the bank account, further action is necessary. For example, if you leave $4,500 from your bank account to your sister and the money is short or missing, the money must still be paid to her. Even if an asset has to be sold, the cash has to go to your sister no matter what. As you can see, updating your will prevents issues with redemption and makes it more likely that your will expresses your true wishes. Speak to your probate or estate attorney to learn more. A will attorney will have the most reliable advice and will recommend the best course of action for your case.

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28 January 2019