My father-in-law, Ronald, is a pack rat. He and my mother-in-law can’t park their cars in the garage of their condominium because of all his stuff cluttering it up. There are old transistor radios, televisions (the black and white variety), kitchen appliances and a host of other things that you couldn’t sell on eBay if you tried.
“What’s this?” I asked picking up a large plastic bottle off of a folding table overflowing with all sorts of junk.
“Vitamins!” Ronald replied, “I got those on sale at Eckerd’s!”
“Eckerd’s hasn’t been around in how many years?!” I asked examining the faded label on the old bottle. “These expired in 1994! Why don’t you throw them away?” I said tossing them into the garbage can. From the look on my father-in-law’s face, I could tell he wasn’t happy with me.
Which leads me to today’s topic – when to throw away old estate planning documents. Often when I update clients’ documents, they ask me what of their old documents should they get rid of.
Let’s address ancillary documents first. Generally speaking, you can get rid of most old durable powers of attorney, health care surrogates and living wills if they have been updated. The one thing that you have to be careful about in this group is the durable power of attorney. Generally speaking it’s okay to get rid of old durable powers of attorney. Where this general rule doesn’t apply – and you need to take other action – is when one of three things has happened: 1) the power holder has a copy of it; 2) it has been used; or 3) a copy of the power of attorney is on file with a bank or financial institution.
If any of those three things are true, then you should have your attorney go through the legal steps necessary to actually revoke the power of attorney. Florida law provides step-by-step instructions that must be followed to properly revoke an old durable power of attorney, including sending notice to the power holder as well as to the proper offices of any financial institution where it has been used. Failure to legally revoke an old durable power of attorney could result in its continued use by the power holder – and unintended and possibly adverse consequences.
Next let’s talk about wills. When you update your will, you might update it by adding an amendment to it – called a “codicil”, or you may revoke the old will in the new one, and create a whole new will. When you amend your will with a codicil, you should retain the old one, since it (or parts of it) remains valid. When you update a will by restating it in its entirety and revoking the old one then it is usually okay to throw out the old one.
The only reason you may wish to keep an old will (or a copy of it) when it has been restated in its entirety is when you want to show a history of some act – such as disinheriting a certain friend or relative.
If you have a revocable living trust, you usually want to retain the old trusts, even if they have been restated in their entirety. This is due to the fact that new trusts usually build on old ones. As an example, let’s say that I have a trust dated January 1, 1996. I restate that trust in its entirety on July 1, 2011. I want to keep the old trust because it has a provision in it that allowed me to amend it – and usually the new trust keeps the date of the old trust so that I don’t have to re-title all of the assets that have been transferred to it. So if the IRS or a financial institution needs to see the old trust to make sure that the new one amending it is valid – it’s a good idea to have that old trust around for that proof.
Never throw away Form 706 Estate Tax Returns of anyone you inherited from, including your spouse, parents and grandparents. Also don’t throw away Form 709 Gift Tax Returns that you and your spouse have ever filed. Give copies of those to your estate planning attorney.
When you’re like my father-in-law who likes to keep things – then this column is of little use to you. But if you are like me and like to clean out useless clutter from your life, then you should ask your attorney which documents you can safely dispose of.
And – by the way – if you would like an old blender that won’t work – give me a call. I can get you a great deal on one.
©2023 Craig R. Hersch. Learn more at floridaestateplanning.com
