New Child? Divorce? Time to Update Your Will

Some studies show the majority of doctors in the U.S. don't have a will. If you do, estate planners urge you to be diligent about changing the terms and updating your IRA beneficiaries when family circumstances change, or your assets may not always be paid out according to your wishes. If you don't, get cracking.

Some studies show that the majority of doctors in the U.S. don’t have a will. If you’re one of those that do, estate planners warn that it’s wrong to get complacent about it. Even if you’re diligent about changing the terms of your will to meet changing family circumstances, such as a new baby or an ex-spouse, your assets may not always be paid out according to what you’ve directed in the will.

The most common problem, experts say, is with individual retirement accounts. Assets in your traditional IRA or Roth IRAs will be paid to the beneficiaries named in the IRAs regardless of what your will may say. If you’ve neglected to remove an ex-spouse as a beneficiary, for example, he or she will get the cash -- even if you’ve written that person out of your will. If you plan to leave your IRA assets to all of your children, a newborn may be shut out unless you have changed your beneficiary designations. Checking your IRA beneficiaries at least once a year to make sure you’re keeping up with life events is a good way to avoid this problem.

If you’re among the majority of doctors who don’t have a will, be aware that state law and the courts will end up deciding how your assets will be distributed. In most states, if you die without a will, your spouse will have to share the estate with your children, and in some states your spouse must share the assets with your parents.

A will also gives you the right to name an executor for your estate; without one, your entire family must agree on an administrator -- often leading to unnecessary conflict and hurt feelings. If they can’t, the courts will appoint one. The process is expensive and time-consuming and can tie up the assets in the estate for months.

A simple will, on the other hand, is relatively inexpensive and easy to complete. You can create one at Nolo.com for as little as $60. But if you have considerable assets, a child with a disability or a complicated family situation, it’s worth the time and expense to have an estate planner draft your will. You can find an estate-planning attorney in your area here.