Important Triggers for Reviewing Your Estate Plan
Written by Abigail C. Waeyaert
As published in the Califf & Harper, P.C. May 2013 Newsletter
There are certain major life events that often cause you to think about creating or revising your estate plan, having or adopting a child, the death of an immediate family member, marriage and divorce being common examples.

Like many states, legislatures in Illinois and in Iowa have enacted statutes to provide default rules for certain changes in family structures and the impact of such changes on your estate planning documents. Like most legislation having to do with inheritance matters, the states have tried to enact statutory schemes which anticipate what "most people" would want to happen to their estate after major family changes. However, the default statutes do not account for every family change and every unique family circumstance. Accordingly, changes in your family structure provide an apt opportunity for reviewing your estate plan.  

One example of such state default statutes are in the context of divorce. Divorcing your spouse will generally revoke every gift and nomination for fiduciary office (i.e., executor) given to your ex-spouse. Some states, i.e. Iowa, extend to gifts and nominations for fiduciary office in favor of an ex-spouse's relatives; other states, i.e. Illinois, do not extend to an ex-spouse's relatives. 

You may be thinking, "Ok, so the statute does exactly what I want it to do. That means I don't have to do anything, right?"  While it may be true that your state's default statute does exactly what you want it to do, equally important is what the statutes don't do. The default statutes just simply cannot account for the unique circumstances in every family situation.  

For example, while the statute in Illinois would revoke a gift or executor nomination of your ex-spouse, it does not revoke a gift or executor nomination in your Will for relatives of your ex-spouse - maybe having your ex-brother-in-law named as successor executor made sense when you were married, but not so much now that you're divorced. Alternatively, it may be desirable to have an ex-spouse continue to be named in a fiduciary capacity in your Will, for instance when young children with your ex-spouse are your sole beneficiaries after divorce and you remain on friendly terms with your ex-spouse. 

Another important consideration is other assets such as life insurance and IRAs that might not be impacted by the default state statutes or that might necessitate litigation to preclude an ex-spouse from gaining an interest in such assets pursuant to a pre-divorce beneficiary designation. 

In any event, it is especially important to review your estate planning documents after a major life event and ensure that your state's default rules don't do something contrary to your wishes. 
For more information on this topic please contact Califf & Harper, P.C. by calling 309-764-8300 or 1-888-764-4999. This article is intended to provide general information regarding the topic discussed herein but is not intended to constitute individual legal advice.