Just Like You Need a Medical Checkup, Your Estate Plan Needs a Checkup

Creating an estate plan is a crucial task for any adult, but it is not a one-and-done task. Think of it as an annual physical exam or a periodic review of your investments with your financial advisor; regular checkups of your estate plan are essential to ensuring that it still fits your life and evolving circumstances and will work the way you intend when you and your family need it most.

No Estate Plan?

Creating an estate plan should be at the top of your to-do list. Without an estate plan, you risk putting your loved ones in a difficult position. If you become sick or are injured and can no longer make your own decisions or manage your affairs and you have not done any proactive planning, the court may have to appoint someone to manage your care and your money for you.

In addition, if you pass away without an estate plan, your loved ones could face a long, expensive, and stressful court process known as probate in which state law—not you—will decide who receives your accounts and property. Think of state law as your default estate plan, but one you did not create or design. The plan that the court imposes is unlikely to align with your goals and circumstances. Even if it does, inheritances in probate court are distributed immediately and with no protections for your beneficiaries. By planning ahead, you can tailor how and when your beneficiaries receive their inheritance and add safeguards to help protect those funds from their potential mismanagement and from their creditors or potential future divorces.

A common myth is that estate planning is only for the wealthy. Anyone who has minor children, other loved ones to protect, or even modest money and property (such as a bank account, a retirement plan, or a home) needs a plan in place. In addition, an estate plan is not only about what happens after you die. A well-designed plan also allows you to choose who will care for you and manage your finances if you are incapacitated (alive but cannot manage those things yourself). Of course, the plan’s complexity will vary depending on your individual circumstances, but every estate plan should be put together with the guidance of an attorney who understands your state’s legal requirements for preparing a valid will, trust, healthcare directive, and power of attorney.

How Old Is Your Estate Plan?

If you already have an estate plan, take a moment to find your planning documents and check the date you signed them. If they were created or last updated more than three to five years ago, they may be outdated and should be reviewed to ensure that they still reflect your wishes. Significant changes in federal and state laws since then could also mean that your plan no longer works as intended or misses opportunities to take advantage of current planning tools or strategies. We can help you update your documents to take advantage of these changes and ensure that your plan is as efficient as possible.

Beyond changes in estate planning and tax laws, life itself is a constant flow of change. A will or trust that you created even one year ago may no longer accurately reflect your family, finances, or intentions today. Have you married or divorced since you last looked at your estate plan? Welcomed children or grandchildren? Moved to a new home or relocated to a different state? Has your financial situation changed, perhaps due to starting a new business, retiring, or receiving an inheritance?

It is easy to forget about your estate plan as life moves quickly, but taking time to periodically review it ensures that your plan continues to protect you and the people you love in the way you want.

Remember These Important Estate Planning Tools

When thinking about whether your estate plan still meets your needs, look beyond just your will or trust. Your financial and medical powers of attorney are also essential; they allow you to designate the people you trust to make decisions for you if you become unable to manage your affairs. It is vital that you frequently review whom you have selected to ensure that they are still able, willing, and the best fit to serve in those roles.

Also, be sure to review your beneficiary designations. Many people are surprised to learn that things such as retirement accounts, life insurance policies, and annuities are not automatically controlled by your will or trust. Instead, they pass directly to the individuals you name on the beneficiary designation forms. If you have experienced a life change, such as a divorce, remarriage, or the birth or adoption of a child, failing to update these forms could result in those funds going to the wrong person. Review any account you have that uses beneficiary designations to ensure that the designations have been completed. If not, your loved ones may have to go through probate to access the funds, and the court may end up deciding who receives them based on state law. Reviewing your beneficiary designations with an experienced estate planning attorney can help ensure that they align with your overall plan—and, if you have a trust, that your money and property will properly transfer into it when the time comes.

Finally, do not forget about your digital life. Today, many of our most valuable possessions are not physical. Their value may be financial, as with cryptocurrency, online businesses, or online financial accounts, or deeply sentimental, such as photos stored online and social media profiles. It is important to include these digital assets in your plan to ensure that they are protected and handled according to your wishes.

Estate Planning Is Not a One-Shot Deal

Life is always changing, and your estate plan should change with it. Instead of thinking of it as a one-time chore, understand that it is an ongoing process that must keep pace with your life to ensure that your loved ones and your wishes continue to be protected.

If you have experienced a recent life change or it has been some time since you reviewed your estate plan, we can help ensure that your current plan still works for you and your loved ones as intended. If you do not yet have a plan, we can help you create one that will grow with you over time.

Contact us today to schedule a meeting and get the peace of mind you deserve.