Your estate plan goes beyond a few legal documents. Your estate plan equates to your wishes, values, and goals for your legacy after you are gone. To ensure that all of those are aligned with where you are now, you must be ready to reassess your estate plan regularly.
Time and time again, assets and family get left out of estate plans because many think that estate planning is a one-and-done process. However, estate planning is a work in progress as your life continues to change and evolve.
Partnering with an estate planning attorney can ensure you are on top of your estate plan through every new era. Now, with the new year upon us, it is time to check in on your estate plan again.
Why You Should Annually Check in on Your Estate Plan
Your life is constantly changing. Whether it’s the birth of a child, a wedding, a passing, or the opening of a business, monumental events can occur under our noses and impact our entire lives. They should also impact our estate plan.
It is essential to reassess your estate plan after major events such as a passing, a wedding, a birth, a business venture, a property purchase, a relocation, a major health or financial change, or other high-impact moments to ensure you are staying up to date on assets and beneficiaries. However, after a wedding, the last thing you are likely thinking about is your estate plan.
So, reviewing your estate plan on an annual basis can give you the chance to consider all that has changed throughout the year and adapt your estate plan accordingly. You don’t want your estate plan to leave out any important details or people that are now in your life.
Reassess Your Revocable Living Trusts
One of the legal documents that you should reassess in your estate plan is your revocable living trust.
A revocable living trust is a major legal document many have in their estate plan, allowing them to keep assets safe, avoid probate, and edit the trust during their lifetime. This is one of the times you should edit your trust.
Firstly, you will want to check whether the right people are still named as trustees and successor trustees. Over a year, relationships can change, and you want to ensure your assets are being entrusted to the right people in your life.
Then, you want to reassess how your assets are being handled and distributed. Does it still align with your goals and wishes for the future? Have you bought a new property or created new accounts? This is your opportunity to change or add whatever is necessary to your revocable living trust.
Give Your Will a Once Over
While many use trusts as the primary source of asset rulings and distributions, your will remains an essential legal document in your estate plan. It is important to check it over and ensure all your ducks are still in a row.
If you have children, you will want to see whether the named guardian for those children is still the one you wish it to be. Just like trustees in a revocable living trust, you want to ensure the people listed are still aligned with your goals.
On the same note, you should ensure that the person you choose as the executor of your will and legacy is still someone you trust to do the job to the fullest.
Ensure Your Power of Attorney and Advance Health Care Directive Are Current
Whoever you choose as your durable power of attorney will make financial decisions on your behalf if you become incapacitated. That is a significant role, and this annual check-in is intended to ensure that the person is still the one you wish to control your financial affairs. Additionally, you should check whether your financial wishes remain the same and adjust accordingly.
In the same vein, your advance health care directive is there to provide your medical preferences and name an individual to make health care decisions for you if you become incapacitated. During this annual check-in, you should ensure that the individual listed is still your top choice and that your advance health care directive still outlines your current medical wishes.
Check Your Beneficiary Directives
A significant yet forgotten detail in estate plans is one’s beneficiary directives. Beneficiary directives are the instructions you’ve provided financial institutions on how to distribute your assets. These could include your 401(k), life insurance policies, annuities, bank accounts, or brokerage accounts.
You want to take this time during your annual check-in to ensure that the instructions you provided the organizations still align with your opinions and objectives today.
Add Anyone or Anything New in the Past Year
An annual reassessment of your estate plan is also the ideal time to add any new assets, accounts, or individuals to your plans that you have accumulated over the past year. If you purchased a new property, vehicle, or had a child or adopted a child, these details should be added throughout your estate plan so assets can be properly protected for whatever may happen.
On the other hand, if you sold a house, lost people in your life, sold a business, or made other changes in the past year, these should also be reflected in your estate plan.
Update Your Estate Plan With the Help of an Estate Planning Attorney
Our estate plan is never top of mind. However, our estate plan can be one of the most crucial legal processes we have set up. To ensure your estate plan is always updated and accounted for, it is wise to partner with an estate planning attorney who can check in on you and ensure your assets and wishes are always protected.
An estate planning attorney can make the process of updating your estate plan simple and take out the daunting nature of planning for the inevitable future.
If you have further questions or wish to create a stronger estate plan for your future, contact the team at Hartmann Law.