Estate planning is a critical aspect of protecting your assets and caring for your loved ones. But it’s not enough to simply create an estate plan. You may need an update to your estate plan to ensure that your legal documents accomplish your wishes.
Let’s discuss six situations in which you should update your estate planning documents in Tennessee.
Update Estate Planning Documents After a Change in Marital Status
In Tennessee, if you get married, divorced, or legally separated, you should update your estate plan. This is essential to ensure that your asset distribution plan doesn’t end up in the wrong hands. This is especially important if your current plan designates your former spouse as a Beneficiary, Executor, or Trustee.
Under Tennessee law, divorce or annulment revokes the following, unless the Will provides otherwise:
- A transfer of property made by the Will to a former spouse;
- Any provision conferring a general or special power of appointment; and
- Any nomination of the former spouse as Executor, Trustee, Conservator, or Guardian.
This section only applies to provisions in a Will that relate to a former spouse. Other provisions in the Will that are unrelated to the former spouse remain valid.
Birth or Adoption of a Child
If you have a child through birth or adoption, you should update your estate plan for the child’s care. These documents also need to name a Guardian in case you or a surviving spouse are deceased.
Additionally, if you created a Will while married, but later divorced and remarried, having a child in the second marriage revokes that Will. This happens by operation of law, which means you don’t even have to take any action for this to happen.
If you are in this situation, either re-executing your current Will or drafting a new one is best practice. This ensures that your estate does not pass by the laws of intestate succession (a default statutory scheme).
Significant Change in Financial Situation
If your finances change significantly, such as a large inheritance or selling a business, you should update your estate plan. The new documents should reflect your new assets and direct their distribution according to your current wishes.
For example, if you had a business that your current estate plan bequeathed to one Beneficiary, that business will not be in your estate if you sell it. The doctrine of ademption would apply. That that Beneficiary may have a legal right to claim the value of that business interest from elsewhere in your estate.
A simple way to address this issue is to amend that provision so it’s not an issue. You may be able to keep most of your Will or Trust intact with only a few minor adjustments.
Update Estate Planning Documents After a Significant Change in Health Status
If your health deteriorates, you should update your estate planning documents to reflect changes in your medical care or treatment. This may also be a consideration if family members have undergone challenges with their Living Wills or Healthcare Powers of Attorney.
For example, you may have certain wishes about life support, nutrition, or hydration if you are in a permanent coma. You may also have specific instructions in the event of a heart attack or cardiac arrest. This could include a do-not-resuscitate order.
These need to be in writing and in compliance with Tennessee law. This provides the greatest likelihood that healthcare providers and your healthcare Agent comply with your wishes.
In Tennessee, you can include a Living Will in your estate plan to specify your end-of-life care preferences. You should also designate an Agent with Power of Attorney for Healthcare. This person will be authorized to make healthcare choices for you if you are unable to do so.
You should have great trust in this person to do what’s right. He or she should have a solid understanding of your values on this sensitive topic.
Relocating to a Different State or Country
If you move to a different state or country, you should update your estate plan to comply with the new laws governing your assets’ distribution.
Tennessee has a statute governing the foreign execution of a Will. Foreign simply means outside of Tennessee. As long as a Will was validly executed in the jurisdiction a person lived in at that time, the courts here will honor it.
But it’s still a good idea to have your Will reviewed at that time. After all, moving to a new state or country is a significant life change. Previous nominations for Guardians, Executors, and Trustees may prove difficult if those people are far away.
If you move to another country, there may be new estate or inheritance tax considerations, as well. While your Will might still be valid, there could be significant taxes owed if the plan does not include tax plans.
Update Your Estate Planning Documents After Changes in Personal Relationships
If your relationships with your Beneficiaries or other individuals named in your estate plan change, you should update your documents to reflect any changes in your wishes or preferences.
In Tennessee, you can modify a Will or a Revocable Trust at any time you are of sound mind. This may be advisable if relationships with your Beneficiaries, Executors, or Trustees take a sour turn.
If a Beneficiary is living in a manner that you do not approve of, you may wish to make changes. For example, you may wish to restructure an adult child’s inheritance through a Trust if he or she has an addiction. In that situation, money could cause significant harm.
Final Thoughts on Updating Your Estate Planning Documents
Regularly reviewing and updating your estate plan is crucial to ensure your wishes become reality. Otherwise, the results may be far from what you intend at this point in time.
Working with a Tennessee estate planning attorney can help you navigate the complex legal landscape and create an effective estate plan that meets your unique needs.
Contact Connell Law, PLLC today to request a consultation.
