Is it Time for an Estate Planning Checkup?

As the year moves into fall and 2024 looms closer, it may be a good time to consider an estate planning checkup before the year ends.  A thorough review of your estate plan should happen every 5 years or so, or sooner if there have been significant changes in your life. Such changes might include death, divorce, or a change in finances. If you haven’t taken a look at your documents in a while, now is the time.

In reviewing your documents, you should ask yourself a few questions. For example, let’s consider your power of attorney and health care directive.

When reviewing the power of attorney, ask yourself if the named agents are still able, and willing, to act on your behalf. Would they be able to manage your finances if you can’t? Are they still healthy enough to take on that responsibility? Have changes in their lives occurred that might impact their ability to serve? Are they familiar enough with your situation to know what they would need to do? For example, do they know where you bank or know the name of your financial advisor? Do they have a copy of the document in the event they need it? Do they have the contact information for your attorney, if they don’t have a copy?

When considering those named as health care surrogates on your Advanced Directive, the same applies, but you should also consider how much this person knows about your current health care situation, and if any, your current needs? As we age, our health care needs can change significantly in five years, and there may be things that you haven’t shared with your named surrogate that they need to know. Would they know who your physicians are, what medications you take, or your preferred hospital? Are they knowledgeable enough to make a medical decision, and possibly an end of life decision, for you based on your current beliefs and desires? Have their beliefs changed in a way that could cause them concern in following your known wishes?

Both documents above should be reviewed by you, and then by your attorney to see if there are any changes in the law, or changes in your specific situation that would warrant an update.

In reviewing your will, make sure those named as Personal Representatives (executors) in your document are still able and willing to act. The usual time to update a will is if there is a life changing event such as the death of a spouse, spouse being diagnosed with illness, loss of a named beneficiary, or a change of heart regarding the disposition of your assets upon death. Often times, I find many clients haven’t updated documents since their children were minors, when they named guardians for their children, who are now adults with children of their own.

For clients with revocable trusts, I suggest you review the assets in your trust and make a list of any if newly acquired assets that are not owned by the trust. Retitling those assets so that they are owned by the trustee of your trust will avoid those assets passing through probate at death. Failure to fully fund your trust during your lifetime will require a court order to move those assets outside of the trust, into the trust before they can be distributed to your beneficiaries.

When reviewing a will or trust, think about your beneficiaries and their current situations. If a beneficiary is on public benefits, an outright distribution could result in a loss of benefits and amending your document to include a special needs trust would be the answer. If adult children are going through financial troubles, a trust under your will can be used to avoid creditors from attaching the inheritance. Do you want to include distributions to grandchildren now that your children are adults? Do you have a favorite charity or organization that you now wish to include in your estate plan?

A quick review of your documents will either give you peace of mind that all is well, or let you know that it’s time to meet with your estate planning attorney to those any changes that reflect your current situation and desires.