Life comes at us fast, and we need to be prepared. There’s no telling when tragedy will strike, so having an up-to-date will in place is imperative in ensuring your assets are distributed according to your wishes.
Wills need to change as our lives do. Having a child is a significant life event and will significantly affect how your assets will be distributed after death. Whether it’s your first child or one of many, your will needs to be updated as soon as possible with each new addition to your family. Although there are shortcuts to writing a new child into your will, the best option is to write a new will altogether.
What Happens to Your Existing Will?
If your will was drafted by an attorney — which is always the best-case scenario — you simply need to contact your estate attorney to make a change. If you opted to prepare your own will, consider having it revised by an attorney, especially after a major life event such as a child’s birth.
Attorneys can alter a will in one of two ways. They can either amend the will with what is known as a codicil change or draft a new will. Codicils are legal documents prepared similarly to a will. They serve to amend a will but not to replace it. Essentially, they allow for minor changes without having to create a new will.
Codicils are useful for altering minutiae like the name of an executor or guardian, but the practice is almost obsolete. Nowadays, most attorneys use digital software to produce wills, so creating a new one isn’t as onerous as it used to be. Creating a new will is also the best option when you wish to make multiple amendments.
It can be tempting to make a hand-written amendment to save time and money, but it is absolutely not recommended. Any handwritten amendments on an existing Will – done without proper formalities of having 2 witnesses, a notary and proper language – will be ignored by the court! Moreover, they make make the entire Will invalid! Is this what you want?
Overall, creating a new will is the best option when writing something as significant as a new beneficiary into it. By drafting a new will, you’ll have peace of mind in knowing your child will receive their inheritance without issue.
Can a New Child Receive Money Under an Existing Will?
Not updating your will can lead to partial intestacy, which means that any assets not covered in your will are governed by statute. Partial intestacy can lead to your assets being distributed to unintended parties.
If you have a spouse or children, the logical next step is for them to inherit your assets, even if you do not have a will. However, it’s best not to leave it up to chance. Asset distribution is not always cut and dried, and a will that is missing a name can make asset distribution a thorny affair. Not only may the child lose out financially, but being left out of a will can lead to emotional turmoil and animosity between family members.
Establishing a Trust
In addition to writing a new child into your will, establishing a Trust adds an extra layer of protection around the child’s inheritance. Putting your assets in a trust is especially important if your child is a minor, as it will ensure they do not receive their inheritance too early.
A trust allows you to control how much money your child will receive and at what age. It will also give you some say in how the child is able to spend the inheritance.
Trusts are vital for children with disabilities or special needs. In this case, you can establish a special needs trust to ensure the child’s inheritance is handled safely.
Why is a Special Needs Trust Important?
It’s only natural to want to leave your child as much as possible after you pass away to ensure their well-being, and it is even more apt in the case of a child with special needs. However, leaving your child with significant inherited assets may bar them from qualifying for Supplemental Security Income (SSI) and Medicaid benefits.
If your new child is disabled or has special needs, a special needs trust will protect their eligibility for public benefits. If you have recently had a new child with special needs, or your child has recently been diagnosed, you need more than a new will. Talk to a skilled estate planning attorney about whether a special needs trust is right for your family.
SSI and Medicaid benefits provide limited coverage, mainly ensuring a disabled individual has access to essentials like food and housing. Having a special needs trust in place can help supplement benefits to provide a better quality of life for the beneficiary.