If you're thinking of modifying your estate plan know this: No matter how carefully you craft your estate plan—Wills, trusts, powers of attorney—life is full of changes.
Anyone with a plan should periodically review their documents. This is to ensure their goals are still being fulfilled. If you need to update, modify, or revoke your estate planning documents, there are procedures available to do so. The exact procedure to be used, however, depends on the document.
Overall, if you’re considering an update to your estate plan, or if you want to review your estate plan and what your estate plan includes, read ahead to get informed.
The Last Will and Testament is the most common type of estate planning document. A Will can direct assets of the testator (estate planner) to go to specific beneficiaries and name an executor (personal representative) to handle the probate process. When you need to modify a Will, you may execute a codicil.
If you've already established a comprehensive estate plan, you might wonder how to go about making changes. Fortunately, the process can be relatively straightforward. One option is to create a codicil, which is a legal document that allows you to make amendments to your existing estate plan without entirely rewriting it.
A codicil is an amendment to a Will. After determining the necessary changes and writing the codicil, California testators need to sign the document in front of two witnesses and attach it to the Will. Testators may revoke a Will in California by making a new one or physically destroying the old one. A codicil can be used to update specific provisions, such as beneficiaries or asset distributions, while preserving the overall framework of your estate plan.
However, it's crucial to work with experienced estate planning lawyers to ensure that the codicil complies with state law and doesn't inadvertently create conflicts within your plan.
There are many different types of trusts. Many trusts are revocable and living, which means modifying or revoking them is relatively simple as long as the settlor (creator of the trust) has capacity. In many cases, creating and signing a trust amendment is sufficient for modifying a revocable living trust. Settlors should consider implementing accepted procedures for changing revocable living trusts in the trust itself.
Conversely, many trusts are classified as irrevocable. If the settlor is alive and has capacity, though, irrevocable trusts may be changed in rare circumstances. The beneficiaries might unanimously agree to change the trust. In other cases, the court might approve a change to an irrevocable trust if the settlor’s goals would be better served by the change.
Testamentary trusts go into effect when the estate planner passes away. Testators usually create these trusts by inserting a provision in the Will. As a result, the most effective way to revoke or modify a testamentary trust is to execute a codicil.
A power of attorney authorizes an agent (attorney-in-fact) to perform certain actions or make certain decisions on behalf of the principal. A principal can usually revoke a power of attorney by informing the agent(s) in writing. Or, if the power of attorney mandates a particular modification or revocation method, the principal must follow that method.
Major life events often serve as catalysts for estate plan adjustments. These events may include marriage, divorce, the birth of a child, the death of a loved one, acquiring substantial assets, or even moving to another state. Changes in state law can also necessitate updates to your plan, as different jurisdictions may have varying regulations governing estate planning. In such cases, consulting with estate planning lawyers who are well-versed in your state's laws can be invaluable.
Life insurance is often a key component of an estate plan, providing financial security for your loved ones in the event of your passing. It's essential to periodically review and update your life insurance policies to ensure they align with your current financial situation and estate planning goals. Changes in beneficiaries or coverage amounts may be necessary as circumstances change.
In many cases, crossing out sections in your Will, trust, power of attorney, or other estate planning documents is not sufficient. If you do not speak to an attorney about your estate plan, your goals might not be met. The best way to ensure your estate plan works for you and your family is to consult an experienced California lawyer. Our Estate Planning attorneys would be happy to speak with you over a consultation; reach out today to set it up.
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