Good for you – you’ve worked with a legal professional to create an estate plan you can put in a safe place and forget about it, right?
Wrong! After the estate planning documents are notarized, it’s important to periodically review them to be sure they are up to date and reflect changes in your situation. This is the best way to avoid problems and stay on top of the decisions you’ve made for your estate.
It is very important to review your Living Trust documents, Durable Power of Attorney, and Advance Health Care Directive on a regular basis. Reviewing these documents once a year will help you address anything that might have changed with your estate.
During these reviews, focus on the following items to help avoid blunders:
- Choice of Trustee – Who have you named as your first, second, and third successor trustee? Are these still the individuals you want to serve as your trustees and are each of them still able to serve in this role? If you had minor children when you created the trust and now they are adults, would you rather name them as trustees instead?
- Living Trust distribution – Does your current distribution still represent how you would want your estate distributed upon your death given the trustees might have changed?
- Have you funded your living trust? – A crucial part of the estate plan is funding the living trust. This requires re-titling assets into the trust, which can include your cash accounts, life insurance, stocks and bonds, any personal property, and even business interests. All of this property should be titled into the name of your trust to ensure proper distribution and avoid probate taxes.
- Are your beneficiary designations up-to-date? – It is important to review all of your beneficiaries for your 401(k), IRA, life insurance, and annuities on a yearly basis as well. Naming a primary and a contingent beneficiary for each designation ensures that they represent your most current intent. Regardless of what is listed in your living trust, upon your death, the administrators for these accounts will distribute them according to the latest beneficiary designation noted.
- For the Durable Power of Attorney and Advance Health Care Directive, review the named primary agent and successor agents and make sure they are still capable of serving in their roles. Also, do the instructions in your Advance Health Care Directive still represent your wishes? Has anything changed with your health or finances in the last year that may affect the directive and the agents? All these questions should be asked, answered, and then properly noted in your documents.
Finally, when it comes to estate planning, there’s no such thing as “set it and forget it.” You must periodically revisit all documents and revise them as needed and desired. This is the only way to ensure that your wishes accurately reflect your most recent decisions and life situation. Submitted by Natalie Spiwak