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Tuesday, January 11, 2011

Beneficiary name changes - should I change my Will?

One of the things I do at my job is sit down with Scotiabank customers to review the Wills and other estate planning documents they already have in place. This is part of my effort to ensure that people keep their Wills up to date.

A question that I hear frequently during these review is what to do about the Wills when one of the customer's children who will one day inherit has changed his or her name. This usually refers to daughters who have married or divorced, but sometimes applies to male beneficiaries as well. Customers ask whether they now have to change their Wills to reflect the new name.

Most Wills describe beneficiaries in two ways, that being by relationship and by name. For example, a father might describe his child in his Will as "my daughter, Samantha Wilson". If Samantha later divorces her husband and goes back to using her maiden name of Samantha Carson, her father should not have to change his Will. He has identified the beneficiary as his daughter, and presumably he has only one daughter with the first name of Samantha.

(Every time I talk about this point I think of the show Newhart. Remember those brothers? "This is my brother Darryl. This is my other brother Darryl". I've never met two brothers with the same first name in real life, so I consider the Darryls to be a one-time exception to the rule!)

To return to my point, I believe that Samantha is identified with sufficient clarity. When her father's Will is probated, Samantha will be described in the application for probate using her current name, but it must also be shown that she actually is the beneficiary. Usually this is done in the application by identifying Samantha as "Samantha Carson, in the Will called Samantha Wilson".

An executor filing an application for probate gives this information to the court under oath, so it is up to him or her to verify Samantha's identity.

Under slightly different circumstances, there might be good reason to update a Will to clarify who is meant. For example, the father's Will might leave a gift of $50,000 to "Samantha Carson" without mentioning how (or if) he is related to her. If Samantha had been named after her mother, there are two women related to the father who are called Samantha Carson, and it's not clear who is meant. Or, perhaps Samantha was not named after her mother, but her brother married a woman named Samantha who uses her married name. Again, there are two Samantha Carsons and it may not be clear who was meant in the Will.

In a case like this, it's probably wise to foresee possible confusion and prevent it by preparing a Codicil.

Just a word of caution - don't write on the Will itself. You may believe that by adding a word or two you are helping to resolve an issue, but you may inadvertently be creating several new issues. A Codicil is the way to go.

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