Adding New Assets to a Will

Grace just called, frantic. Her mother passed away last month, and a recently discovered stock portfolio – substantial, over $300,000 – wasn’t mentioned in the will. Because the will hadn’t been updated in five years, the portfolio will now likely be subject to full probate, adding months of delay and tens of thousands in legal fees to an already difficult time for her family. She’s understandably devastated, wishing her mother had simply addressed the new asset with a simple codicil.

The question of how to handle newly acquired assets after executing a will is incredibly common. Many clients assume a will is a “one and done” document, but that’s rarely the case. Life happens – marriages, divorces, births, deaths, and, importantly, significant changes in asset ownership. These events necessitate a review and potential amendment of your estate plan.

The most common way to address new assets is through a codicil, a legal document that modifies an existing will. It’s a simpler, less expensive alternative to rewriting the entire will. However, a poorly drafted or improperly executed codicil can create more problems than it solves. If a codicil is invalidated, assets may force full probate; however, for deaths on or after April 1, 2025, estates under $208,850 (per CPC § 13100) may still qualify for simplified procedures. This limit is set until 2028.

What Types of Assets Need Updating in Your Will?

It’s not just about large purchases like real estate or stock portfolios. Think broadly. Any asset not specifically addressed in your current will should prompt a review. This includes:

• Real Estate: New properties, or significant improvements to existing ones.
• Financial Accounts: Stocks, bonds, mutual funds, brokerage accounts – especially those acquired after the will was drafted.
• Business Interests: Changes in ownership of a business, or the acquisition of a new business.
• Digital Assets: Cryptocurrency, online accounts, and digital property require specific language to ensure access for your heirs… a standard codicil often fails to include the specific RUFADAA language (CPC § 870) required to bypass federal privacy laws, potentially leaving your heirs locked out of crypto-wallets and email accounts.
• Personal Property: High-value collectibles, artwork, jewelry, or other items that have increased significantly in value.

Can I Simply List New Assets in a Memo?

Some clients consider a separate “letter of instruction” or memo detailing how to distribute new assets. While this can provide guidance, it is not legally binding. A court will prioritize the language of your legally executed will and any valid codicils. A memo may be considered by the court, but it won’t override conflicting provisions.

What About Trusts? Do They Need Updating Too?

Absolutely. Revocable living trusts offer many benefits, but they require consistent funding. Adding assets to a trust after its creation is essential to ensure those assets are distributed according to the trust’s terms. Failing to do so can result in those assets being subjected to probate, defeating the purpose of the trust. Furthermore, if you created credit shelter trusts decades ago, the 2026 ‘tax cliff’ was averted by the OBBBA, which permanently increased the Federal Estate Tax Exemption to $15 million per person effective Jan 1, 2026. Old formula clauses should be reviewed to ensure they don’t over-fund trusts under these new limits.

Updating Your Will When Starting a Business

Launching a business is a major life event demanding immediate estate planning attention. If your business is structured as a Limited Liability Company (LLC), be aware that as of March 2025, FinCEN has exempted domestic U.S. LLCs from BOI reporting; however, foreign-registered entities in the U.S. still face mandatory filing requirements and potential penalties. Additionally, your will should clearly state how your business interests are to be transferred, and whether there are any restrictions or agreements in place. Without clear instructions, the business could face disruption or even liquidation.

I’ve been practicing estate planning and tax law for over 35 years, and as a CPA as well as an attorney, I often advise clients on the implications of asset valuations and step-up in basis. Adding an asset to a trust or updating a will isn’t just about listing the item; it’s about minimizing potential capital gains taxes for your heirs. Properly structuring the transfer can save your family a significant amount of money. For example, failing to update beneficiary designations on retirement accounts can lead to unintended tax consequences.

What About Handwritten Wills (Holographic Wills)?

Handwritten codicils are valid in California under Probate Code 6111, but only if the signature and material provisions (who gets what) are in your own handwriting. No witnesses or notary are required for this specific format. However, I strongly advise against relying solely on holographic codicils. They are often prone to ambiguity and can be easily challenged in court. A formally typed and witnessed codicil provides much greater legal certainty.

Don’t wait for a crisis to prompt action. Regularly reviewing your estate plan – at least every three to five years, or whenever a significant life event occurs – is a crucial step in protecting your family and ensuring your wishes are carried out.

How do California courts decide whether a will reflects true intent or creates ambiguity?

In California, a last will and testament operates within a probate system that emphasizes intent, clarity, and procedural compliance. When properly drafted, a will does more than distribute property—it creates legally enforceable instructions that guide courts, fiduciaries, and beneficiaries through administration with fewer disputes and less uncertainty.

To distribute property effectively, you must define what is in the estate, clarify who inherits, and understand how estate liabilities impact the final distribution.

When a will is drafted with California probate review in mind, it becomes a stabilizing roadmap rather than a source of conflict. Clear intent, proper authority, and compliant execution protect both families and estates.

Primary Legal Authorities Governing Probate and Estate Administration

• Probate & Local Court Rules:
  
  Riverside Superior Court – Probate Division
  
  Official Riverside County probate rules (Title 7), filing procedures, examiner notes, and specific protocols for remote appearances via the court’s designated platform for non-evidentiary hearings.
• Attorney Licensing & Ethical Standards:
  
  State Bar of California
  
  The authoritative source to verify attorney license status, disciplinary history, and current ethical rules governing California attorneys and client trust accounts (IOLTA).
• Judicial Council Forms & Self-Help:
  
  California Courts – Wills, Estates, and Probate
  
  State-issued probate forms and guidance, including small estate procedures ($208,850 limit), primary residence transfers under AB 2016 ($750,000 limit), and executor responsibilities.
• Federal Estate & Gift Tax Law:
  
  IRS Estate Tax Guidelines
  
  Federal rules governing estate and gift tax filing, including the permanent 2026 exemption of $15 million per individual (indexed for inflation).