Updating Documents

At the risk of delivering this message too many times, it is important for people to think every so often about updating their critical documents, such as wills, trusts, power of attorneys, health care directives (often called living wills) and HIPAA forms. It just takes a few moments to think if the person or persons you have named to act for you are still capable of doing that job. Are they still alive? Are they still mentally or emotionally capable themselves to act as your executor or power of attorney, or health care representative? Would they still have your best interests at heart? Do they get along with other beneficiaries? Has a child gotten into a difficult marriage where the spouse would influence your child to try to disfavor some of the beneficiaries in some way? A change in health is often a reason to change beneficiaries. Let’s say one of those beneficiaries due to debilitating health, or the health of their spouse, needs long term care. Often that person either should not get that money directly, or perhaps it should be given to their children, or a trust for the family members so that the funds would not count against the sick one. Time does go by, and if appropriate updates are not made, and you become incapable or die, it may be necessary for your heirs to go to court to name a replacement. That will mean extra time and expense.

When simple updates are needed, an experienced attorney should also advise you of any changes in the laws that should be taken into account instead of just substituting the new names. For example, several years ago the legislature changed the power of attorney law to require specific language if you wanted to allow the person named as power of attorney (called your agent) to make gifts to himself or herself. And if that gift was to include real estate, it had to specifically include “real estate.”

In most cases people will have named a backup to the original person named as executor or power of attorney. But often that is a relative of about the same age, and if the relative dies before you, there is no longer a backup. That situation is not something that people think about, so this article is to serve as a reminder to review if your backups are still alive, or if circumstances have changed and you no longer think they are the best people you would trust to handle your affairs. Just as laws can change, so do people. It may simply be age related, or health, or maybe they no longer see eye to eye with you.

Another example could be a child’s second marriage where you have grave concerns about the spouse’s financial wisdom, or overbearing influence over your child. In that case the substance of the will or trust might be changed so that assets do not go directly to your child but to a lifetime trust for the child and grandchildren. Such a change could ensure that those grandchildren will receive the benefit of your inheritance and not that child’s spouse who may not have your child’s children, your grandchildren, at the top of their concerns. Regardless, the point is that laws, people, and circumstances can change, and it is prudent to keep that in mind to protect yourself, your family and your hard earned assets so that they will be used for you while you are alive and will go to the people you want after you pass away.