Most people are familiar with the concept of an annual medical examination. Very few people, however, regularly review their legal and financial affairs with their attorney. Changes in one’s family or financial situation coupled with changes in the law make it advisable to take a fresh look at your “legal health” from time to time.
It is advisable to review one’s legal, financial and insurance documents with your professionals every two to four years, or more often if your personal circumstances change. For instance, divorce should automatically trigger a review of one’s current legal documents. An important aspect of your legal checkup is a review of all the beneficiary designations on your life insurance policies, pension plans, and all other assets which carry a death benefit. This is particularly true if one is recently divorced. Quite often, people overlook changing the beneficiaries of insurance policies or retirement benefits after divorce leading to disastrous results; where an ex-wife or ex-husband is still listed as beneficiary.
Marriage should also lead to an examination of your legal documents. For instance, a couple who own their home together as “joint tenants” prior to marriage, should change their tenancy to “husband and wife as tenants by the entirety” after their marriage. This type of tenancy is still a joint tenancy where the survivor of the couple maintains sole ownership of the home, but it now becomes much more difficult for a creditor to sell the home to satisfy a legal judgment.
The basic estate planning documents consist of a will (with or without a revocable trust), durable power of attorney, and health care proxy. These documents should be reviewed on a regular basis to assure that they properly serve the purpose for which they were originally intended.
In my legal practice, I review many wills that should have been updated years ago. These wills list old neighbors from another state as guardians for minor children. Some list defunct banks or other institutions as trustee for minor children. Others list now deceased relatives as executor of the will.
Most legal documents, unless set up as irrevocable, must be modified as circumstances change. Changes can generally be made quickly and inexpensively. A will may be easily modified by a simple codicil which, in most cases, can be prepared by an attorney, immediately if necessary.
During this “legal checkup” your attorney may suggest other ways to protect you, your family, and your home. Have you filed a declaration of homestead to protect your home? Did you know that this protection doubles at age 62, but only if you file a new declaration at the Registry of Deeds? Did you know that in Massachusetts there is no such thing as a “living will”, but a medical directive executed with your health care proxy form can serve the same purpose?
Your family attorney is trained to ask the right questions. When you next call your physician to make that annual physical appointment, call your family attorney to schedule your legal checkup.