The past few months have shaken many property owners, parents and anyone who owns a stock portfolio. Economic downturns are not new, but this one seems to have shaken the very core of many businesses and their employees. Many people who had counted on stock portfolios for retirement, for jobs to last many more years and for school loans to continue throughout college have had their lives turned upside down by losses, rejections and unemployment.

How do these life changes effect the plans you've made for your retirement or death? Do you need to change your will? If you had to take a job in a new state or if you've lost a home or other financial gains you've noted in your will, the answer may be “yes.” While most folks can manage those changes with a codicil (any addition made subsequent and appended to the original will), you may want to review that will and any other death documents you created in the past to make sure that a codicil is sufficient.

If you have an estate plan or if you plan to create one, you might consider the following lifestyle changes that could alter your life as well as your estate:

• Marriage or Divorce: Either action may increase or decrease your family size and your plans for beneficiaries. Even if you plan to include step-children or ex-spouses in your will, you may need to update addresses and phone numbers.
  
  
• Children Married or Divorced: Have you included your son- or daughter-in-law in your will? You may or may not want to continue to include those individuals in your plans, so those changes must be noted.
  
  
• Relatives, Beneficiaries, Executor Dies: Even if these individuals do not die before you, your relationships with these individuals may change over time. A reevaluation of your relationships might move you to make a few changes.
  
  
• Moving to Another State: State laws vary widely in some instances, especially when it comes to common-law marriage and legalities involved with death documents such as wills. While you might be tempted to wait until you move to make changes to your documents, a better way to deal with changes would be to find out what you need to change before you arrive at your new home.
  
  
• New Business or Property Ownership: Even if you plan on owning a business or a property for a short time, you cannot plan for the unexpected. What will happen to that property or business if you die unexpectedly? Minor changes you make to your will now can save many months of heartache for your loved ones.
  
  
• State or Federal Tax Laws Have Changed: In most cases, minor changes may not affect your estate plans. However, you might keep an eye on gift taxes, estate taxes and any other changes that may prove more profitable if you make changes now. For instance, giving while living may make more sense to some individuals rather than forcing the beneficiary to wait until you die.
  
  
• Gift Giving: If you do plan to begin dispersing your estate before you die, then you'll need to change your will to reflect your actions. On the other hand, if you've received a significant inheritance, you may want to decide how to invest it, spend it (yes, it's fine to spend it) or disperse it in your estate plans.
  
  
• More or Less Charitable Giving: In this economic environment, your role may have changed from philanthropist to the person on the receiving end of the soup line. If your giving will no longer reflects your penny-pinching lifestyle, you might think about revoking that old will and starting over, with room to earmark those charities that remain important to you.

While some folks don't review their wills for years, it might be wise to check yours yearly to make changes during this economic environment. You might be surprised at how you were feeling last year about your daughter-in-law, for instance, after you review your old will. Perhaps your feelings toward her have blossomed and you feel more generous now. Or, if you left stocks to one child and an equivalent value of real estate to another child, you might want to revisit the values of that stock and real estate. Prices can change drastically with changes in the stock and real estate markets.

Depending upon your state laws, you can change, add to, or even revoke your will any time before your death as long as you remain physically and mentally competent to make that change. While you usually cannot cross out old provisions in your will and scribble in new ones, you can use codicils to alter your will. With that said, you may have less reason for a codicil if you know about ademption in writing your will.

Ademption occurs when your will lists something you no longer own. If, for example, you willed your home to your daughter and you don't change your will after you lost that home in foreclosure, the gift will just fail in your will if you die. The beneficiary would not be entitled to another home or any other pieces of your estate. One way to change this option is through specific language such as, “I give my home located on 113 Alma Mater Lane to my daughter, Anna; but, if I don't own it at the time of my death, I give her a choice of any other home I own within the state of Arizona at the time of my death.” You can substitute other assets for that home that no longer exists, as well as deny any substitution at all.

While you can make a will yourself through many will-making Web sites or by understanding your state laws, at some point you may need the help of an attorney. Sometimes, with professional help, you can rest assured that your estate is distributed quickly as you avoid excessive taxes and expenses as well as ease the strain on your loved ones.

Until Later,
Linda Goin