Your estate plan is essential for managing your wealth while you are alive and distributing it after your death. Such an impactful set of documents should be kept up to date to ensure that your legacy, both financial and otherwise, is passed on in accordance with your wishes and that your beneficiaries receive their benefits as smoothly as possible.
With that in mind, you should review your estate plan at least annually. These questions should help you decide if now is the right time to revisit your estate plan.
- When did you last update your will and other estate planning documents? Has the value of your assets changed since that time? If its been several years since you’ve updated your will and other estate planning documents, chances are you’ve experienced changes that could impact your estate plan. Additionally, if your assets have increased since you last updated your estate planning documents, you may be in a position to take advantage of some tax saving estate planning techniques that weren’t necessary when you last updated your estate planning documents.
- Has your family structure changed? (Death, marriage, divorce, birth of a child or grandchild, etc.) As your family evolves, so should your estate planning documents. With every change in your family structure it is important to reevaluate your beneficiaries, trustees, successor trustees, executors/personal representatives, and agents under powers of attorney. The birth or adoption of a child or grandchild may call for the creation of gifting trusts, 529 education plans, gifting plans, or Uniform Gifts to Minors Act accounts.
- Do you know where your original, signed wills and other estate planning documents are located? Do your closest family members know where your original documents and copies are kept? It is essential to know where your original estate planning documents are located and that your loved ones know where they can find them. During the probate process, the Probate Court will require that the family produce the original will of the deceased. While possible to probate a copy of a will, it is considerable more difficult and costly. If you don’t know where your original documents are, it may be time to update your documents.
- Are the executors, trustees and guardians listed in your will still the best possible lineup to carry out your wishes? People move and relationships change – the people you named in your will to carry out your wishes may no longer be the best choices. Your best friends who you named as guardians for your children may have been the best choice at the time you initially did your estate planning, but what if they’ve moved across the county or divorced? Are they still the best option to care for your children?
- Have you acquired any unique assets that require special attention but are not addressed in your current documents? Assets like business interests, family vacation property, and art, wine, and gun collections are examples of unique assets that require special planning. If your current documents don’t specifically address these assets, you may benefit from available planning tools.
- Are your beneficiary designations up to date for assets that do not pass under a will, such as life insurance policies, individual retirement accounts, and 401(k) accounts? After a marriage, divorce or death it is essential to update your beneficiary designations. In many cases, a person will want to designate their spouse as a beneficiary. In event of a divorce, they will often wish to change who receives benefits upon their death. However, after drawn out divorce proceedings updating key beneficiary designations to reflect the desired changes is often forgotten.
- Are there any aspects of your planning that may cause disagreement within your family if not specially addressed? Family feuds often occur over inheritances, resulting in lengthy, painful, and costly litigation for everyone involved. With careful estate planning, future family conflicts can be avoided. If has come to your attention that there is an aspect of your planning that could cause conflict, don’t delay dealing with it. Act now to revise your planning to save your family from the pain and expense of a dispute over your wishes.
- Are you still comfortable with the ages that you previously selected for your children to receive their inheritances outright? Whether the amount of the inheritance is $10 million or $10,000, not everyone is equipped to handle a windfall of cash. The appropriate age to receive an inheritance depends on the beneficiary: how has the beneficiary managed their money in the past? Are there any concerns about substance abuse or gambling? Does the beneficiary have alimony or other financial obligations that need to be addressed? Does the beneficiary run a business that has a high risk of being sued? Knowing what you know now about your children, you can determine if you are still comfortable if the ages you previously selected or if you need to update your documents to modify the ages which you children will get access to assets.
- Do you have both financial and health care powers of attorney in place to allow your loved ones to make decisions on your behalf if needed? Many people assume that a will is the only estate planning they need to do. While writing a will is a crucial part of the estate planning process, it is far from being the only part. In addition to dividing your assets after death, it is essential to make plans for yourself while you are alive. Often people suffer illness or injuries that make it impossible for them to make the necessary plans. Financial and health care powers of attorney will establish who will take care of your financial decisions and your medical decisions if you are incapacitated and unable to make these decisions on your own. After reviewing these questions, if you have any questions or concerns about your current estate planning documents it is a good time to meet with an estate planning attorney to review what you have in place and make a plan to address your concerns.
Knowing the reasons why you may need to have your will updated helps you keep your estate plan current so that you achieve all of your goals and maximize the value of your assets for your loved ones.