Spring is here, and as you look around and contemplate ways to refresh your homes and outdoor spaces, consider taking some time to review your estate plan as well. As time rolls along, it’s vital to assess if you need to revise, add, or remove elements of your plan.
Here is a quick checklist to help guide you when you review your estate plan.
Has it Been a While Since You Reviewed Your Estate Plan?
To ensure that an estate plan is up to date, it should be reviewed typically every five years or so by your fiduciary financial advisor, and even more often if there are major life events such as deaths, births, divorce, updates in assets, or health-related changes.
An essential element of any estate plan is its designated fiduciaries, such as guardians, trustees, executors, and agents. The decisions made about these key individuals may have changed since you initially drafted your estate plan. For example, as you age, you may decide to designate one of your adult children as a decision-maker in your affairs rather than your parent, spouse, or sibling.
Do You Have a Change in Your Assets?
When your assets change, an update to your estate plan will often be necessary. An example of this sort of situation would be if you receive an inheritance from someone and you have a trust; you will need to transfer the assets or update your trust to ensure that it falls in line with the desired format of your estate plan. Another example would be if you own a home within an irrevocable trust and decide to sell it, you must make sure this transaction is handled correctly so you do not unintentionally break the trust. It’s always a good idea to consult with an estate attorney before making significant decisions, such as selling a home.
Do You Need A Will or Require an Update to Your Current Will?
It is paramount that everyone has a last will and testament. This legal document expresses an individual’s wishes regarding how their assets will be dispersed following their death. When an individual dies without a will in place, their property falls under the intestacy statutes and must go through the probate court for dispersion. If you have a will in place, you may want to update your will if your circumstances have changed. For example, you may have additional family members through marriage or birth that you may wish to include in your will. You may also want to remove a guardian or trustee from your adult children’s inheritance so they may receive funds directly.
Are You Happy With Your Chosen Beneficiaries?
As you move through life, the desired beneficiaries of your estate may change. This is true of your will, as we discussed previously, and heirs of certain assets such as IRAs, retirement plans, 410(k)s, life insurance, and annuities. A prime example of an event that would alter some of these decisions on beneficiaries would be a marriage or divorce. In addition, you may have a beneficiary of a child or grandchild that will need special protection because they have special needs or have trouble managing finances independently. In this case, establishing a trust for their benefit would be advised.
Relationships are ever-changing and ever-evolving, so it is not unusual for adjustments to designated beneficiaries throughout one’s life.
Do You Have a Safe Place to Keep Your Estate Planning Documents?
Your family needs access to your estate documents during an emergency or upon your death. For example, documents such as a health care proxy and power of attorney often need to be readily available at a moment’s notice, so having your estate documents easily accessible will help tremendously during difficult times. One option is to keep your files in a locked cabinet or drawer. In today’s technology age, there are also numerous online methods of secure storage that you can explore. Having online access would allow family members to quickly access your documents when needed and eliminate the threat of lost or damaged estate documents.
Do You Have a Trusted Financial Advisor and Estate Attorney?
Just like you would not want someone without the proper training and education to perform surgery on you or a loved one, it is essential that you find the right qualified professionals to assist you in your estate planning. An estate attorney can ensure that you use the proper language in your documents to uphold your wishes. Also, they stay abreast of changes in the law so they can update your plan. Additionally, A quality fiduciary financial advisor will help you discover your goals and the concerns you have in mind. By enlisting a holistic approach to creating a personalized financial plan, your financial advisor can develop a framework that focuses on creating a meaningful legacy for yourself and your family. Working with both an estate attorney and fiduciary financial advisor ensures that no loose ends are left behind and that the legacy you leave for your loved ones is steadfast and solid.
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