Most people have the same questions about estate planning. What is the difference between a will and a trust? or do I need to go through probate? or will I need to pay estate taxes?
Since one of the goals of this website is to help you learn more about estate planning, I figured that I would share one of those common questions recently sent to me by a client:
I created a trust several years ago which provides that my daughter will receive 1/2 of my estate. But since my trust was created, my daughter gotten married and changed her last name. Do I need to update my trust in order for her to receive her inheritance?
It is not uncommon for people to change their names. A name change is most often due to marriage or divorce, but as the hit TV show Friends taught us, you can also change your name whenever you feel like it. (Author’s note: The episode where Phoebe changes her name to Princess Consuela Bananahammock and Mike changes his name to Crap Bag is pretty accurate. That is actually a legal thing that people can do.)
Considering all the time and care and money you have spent on your estate plan, it is important to make sure that name changes (for whatever reason they happen) do not mess it up.
Why do names matter in estate planning?
First and foremost, your name matters because you are the one creating the documents. If I have a power of attorney that says it was made by Stephen Simpleton (instead of David Postic), that document will likely not work the way I want it to.
Names also matter because your estate planning documents generally list people (1) to make decisions for you during your lifetime, if you cannot, and (2) to receive your “stuff” after your death. That’s really the core of what estate planning means.
Because there is nothing new under the sun, a lot of people have the same or similar names. How does this affect your estate plan? Attorneys often include additional information in estate planning documents to help identify the people named as your beneficiaries or representatives.
For instance, your will might provide, “My house shall be distributed to my only daughter, Mary C. Doe.” Even if Mary changes her name, you can be pretty certain that your executor and the probate court will understand or be able to easily figure out who you are referring to, since she is your only daughter.
That’s the main rule of thumb: As long as anyone can confidently identify the person named in your estate planning document, it is generally alright to leave the document the way it is.
Think of it from a practical perspective. After all, estate planning documents are created to be used. What potential problems could someone have in using your estate plan? If a name change would not cause any problems, then you may not need to change anything.
On the other hand, you want to make sure your estate planning documents work. If a name change could cause problems, delays, or other difficulties, a change can be a good idea.
When you should consider updating your estate plan?
I should go ahead and dispel a common myth: You do not need to amend your estate planning documents anytime something changes in your life. There are a lot of reasons why you should update your estate plan, but you should always talk with an attorney to see if a change is even necessary.
That being said, name changes are a big deal. Here are a few scenarios in which it may be a good idea (or even necessary) to update your estate plan:
Example 1. Let’s say your durable power of attorney appoints your daughter, Mary C. Doe, as your medical attorney-in-fact (i.e., the person who gets to make medical decisions for you). She then gets married and changes her name to Mary Doe Johnson (or Mary D. Johnson). The name change is reflected on her driver’s license and other forms of identification.
If Mary needs to act as your attorney-in-fact (e.g., talk to your doctor, get copies of your medical records, consent to a medical procedure), will your health care provider recognize her as the person granted that authority in your medical power of attorney?
With medical professionals so concerned about privacy (as they should be), there is a good chance that such a different name could give them pause before talking with your daughter. After all, how do they know that Mary is who she claims she is?
Mary might be able to sort things out — for instance, she could show her marriage license or court papers establishing her name change. But who keeps those documents on them all the time? And considering that a medical power of attorney is often used in connection with emergency situations, you want to work EXACTLY when you need it. No delays.
So in this case, your daughter’s name change might make an estate planning update advisable, to help ensure there will be no problems identifying her.
Example 2. Another situation in which you might want to update your estate planning documents is when your representative or beneficiary has a common (or, at least, not one-of-a-kind) name. This isn’t really due to name change but rather a fact of life.
If your son is named John Smith, how do third parties (a bank, a hospital, a closing company, etc.) know that the John Smith standing in front of them trying to withdraw money from your bank account or trying to access your medical records is the same John Smith named in your documents?
Again, you want your estate planning documents to work when they need to work. Amending your estate plan to include a relationship (“…my nephew, John Smith…”) or a birthday (“…my nephew, John Smith, born January 1, 1980…”) can help clear up any doubts the common name might raise.
Remember earlier when I said that the key with names in estate planning documents is to make sure you provide sufficient clarity so that anyone can confidently identify the beneficiary or representative named? When it comes to common names, consider the opposite:
If a third party might have any doubts that the person named in your estate planning document is the person try to use that document, you may want to update your estate plan to help minimize those concerns.
If you are reading this article and thinking, “Hmm, my last will and testament might be a little vague. I think I’ll write a note on it that provides more information,” — STOP. Making notes, adding language, crossing out words, or making any other changes to might invalidate that estate planning document.
Instead, as with all things legal advice, consult with a qualified estate planning attorney to make sure that any changes are made in the proper way.
Does your estate plan need to be updated?
Many name changes might not warrant updating your estate plan. However, everyone’s circumstances are different, and yours might make an amendment necessary or advisable. If you have even a question about it, don’t delay making changes to your estate plan. Your loved ones will have to pay the price if you do.
If you would like to know whether your estate plan should be updated — or if you want to create an estate plan for the first time, contact the experienced Oklahoma City estate planning attorneys at Postic & Bates for a free, no-obligation consultation appointment.
David M. Postic is an attorney at Postic & Bates, P.C. His practice focuses on estate planning, probate, real estate, trust administration, business planning, and adoption.
You can email David through our Contact Us page or by calling our office at (405) 691-5080.
[As with all our blog posts and other publications and resources, the contents of this article do not constitute legal advice and are subject to our site-wide disclaimer.]
