Protect your family through estate planning.
Picture what is important to you.
Do you have that picture clearly focused in your mind’s eye?
Did you envision your spouse and your children?
Now, picture them without you.
Do they still have the family home?
Will there be tuition for college?
Is there still food on the table?
According to a recent The National Law Review article titled “Protect Your Spouse and Children by Updating Your Estate Plan,” the answer to these questions may be “no” if your estate plan is outdated.
Perhaps you are thinking all necessary steps have been taken to protect your family, because you do have an estate plan.
How long has it been since you updated your estate plan?
Did you get divorced or remarried?
If yes, you will want to update your last will and testament (or your fully-funded revocable living trust).
It is likely you named your former spouse as the primary beneficiary of your entire estate.
In many states, your assets will pass to your ex if you die without a new last will (or a fully-funded amended revocable living trust).
Although some states have laws where an ex-spouse is automatically disinherited after a divorce, this could still cause issues.
The assets may pass to the alternate beneficiaries under your original last will (or your fully-funded revocable living trust).
For example, in Kansas this may mean your siblings could receive everything and your new spouse would receive next to nothing.
You need to update your last will (or your fully-funded revocable living trust) to protect your family.
If you do not have a last will (or a fully-funded revocable living trust), create one as soon as possible.
Without a last will (or a revocable living trust), you may die intestate.
In this case, the state will choose your heirs based on the laws of the state.
Updating your estate plan does not end with your last will and testament (or your fully-funded revocable living trust).
To protect your family, you need to review your accounts and beneficiary designations.
Certain assets do not pass through probate.
Instead, beneficiary designations indicate the legal heirs.
Let us consider a situation where you named a niece as your beneficiary to your IRA.
You then were married and had children.
Unfortunately, you died without updating your beneficiary designations.
Your new spouse and child will not see a dime of the money you saved in the IRA.
In Kansas and Missouri, many assets may pass through beneficiary designations including real estate, bank accounts, investment accounts, and life insurance policies.
Although 401(k)s also pass via beneficiary designations, ERISA stipulates that only a spouse may inherit unless written consent to a different beneficiary is given by the spouse.
Although you must update your estate plan after major life changes, you should review your plan with an experienced estate planning attorney every few years to protect your family.
State and federal laws may have changed to impact your estate planning goals, let alone changes in your own family dynamics.
Reference: The National Law Review (March 16, 2020) “Protect Your Spouse and Children by Updating Your Estate Plan”