Legacy Killer: Could This Situation Undermine Your Estate?

If you are one of the 30 percent of Americans who have a will in place, you’re on the right track with your estate plan. Having a valid will gives the probate court, your personal representative (executor) and your heirs a clearer idea of your intentions after you pass.
A will is created to last. Most state laws dictate that legally valid wills don’t have expiration dates. Unfortunately, that’s a problem. We often have “set-it-and-forget-it” mindsets in these situations. Once in hand, we put documentation in a filing cabinet and never look at it again, or maybe lose track of it altogether!
Wills and estate plan documents that become out-of-date can become legacy killers. Is your will a bit stale? Have you read it, or updated it in the last five years? Ten years? Does your will reflect the most current list of heirs, or does it need to be updated due to family changes—such as births, deaths, adoptions, marriages or divorces?
The consequences of out-of-date documents are many to your heirs.
  • Old, out-of-date documentation could extend the time your estate is in probate, and potentially open your estate up to legal challenges. If your estate is delayed in probate, your spouse and heirs might have to wait months for much needed funds to pay off taxes, debts or funeral expenses.
  • If there are errors or ambiguities in your documents or will, will this cause heartbreaking conflict among family members or heirs when they try to determine your intentions? Don’t forget that they are likely grieving your loss during this process. You can avoid compounding any financial and family strife after your death by taking a couple of hours now to make the proper updates. You should also review any conditions that might be outlined in your will regarding your heirs. Do the conditions still apply? Are they relevant?
  • Another incredibly important type of documentation to keep up-to-date is the beneficiary listings on assets like life insurance, annuities, pensions, IRAs, 401(k)s or any accounts or property set up with payable-on-death (POD) or transfer-on-death (TOD) forms. Out-of-date beneficiary designations increase the possibility of assets headed to probate court, which potentially leads to assets ending up in the hands of people you never intended. If you have additions or subtractions to your extended or blended family, your assets could become the property of strangers—such as stepchildren from a previous marriage—or even those estranged from you.
  • Don’t let stale documents deflect your charitable giving dollars in unacceptable ways. If your old will contains charitable bequests, are those charities still in operation? Is the charity’s vision aligned with your charitable goals? Is it led by a board or leaders who uphold the original mission that inspired you to make the bequest? Is it possible your bequest no longer fills a relevant need, such as a gift to a capital campaign that has expired or charitable fund that has been depleted? You should also reconsider if charitable bequests in your will are the most tax-advantaged ways to give. (The Catholic United Financial Foundation has multiple giving methods that may be more beneficial to your current financial situation and the charity of your choice.)

There’s a simple defense against this legacy killer and it is to review your will and estate plan documentation every three years, and after every significant life event (birth, death, change in marriage status, major financial change, etc.).

If you need updates, get help from a financial professional like your Catholic United Financial Sales Representative. Certain documentation, such as a beneficiary update, does not require the help of an attorney, and can be changed with a simple form submission.

If you do need substantial estate revisions or want to start over with a new will, your local Sales Rep knows where to look to give you an accurate overview of what’s missing or out-of-date regarding your estate paperwork. An appointment with your rep before you meet with your lawyer can help you get prepared and organized so you spend less billable time at the law office.

The information provided is based on our understanding of the laws currently in effect. Neither Catholic United Financial nor the Catholic United Financial Foundation provides tax or legal advice. Consult your personal tax or legal advisor with questions about your specific situation.