Are your estate planning documents tucked away in a safe deposit box or file drawer at home? When was the last time you looked at them? Have circumstances — retirement, financial situation, grandchildren, family matters — changed since you prepared them? These documents won’t serve you or your loved ones if they are out of date.
If it has been more than five years since you last reviewed your estate plan, or if there have been changes in your life, it’s time for a review. You will be protecting your loved ones from the unintended consequences of a plan that no longer reflects your family or financial situation, or your wishes for how your assets are to be distributed.
Review All The Documents That Will Distribute Assets From Your Estate
While a will or trust may be the core of your estate plan, some of the substantial assets you own might not be distributed by your will or trust. For example, if you have an IRA or other retirement plan, those accounts may be distributed to the beneficiaries you named on forms you filed with the plan unrelated to your will. The same is true for a life insurance policy and many other financial accounts. Be sure to review all of your accounts for which you may have completed a beneficiary designation form. The good news is that these forms can be easily amended — often it can be done online.
Reviewing Your Will or Trust
You should pay special attention to several aspects of your will or trust when doing your review.
- Family situations
Marriage, divorce, birth or death can require a substantial change to an estate plan. Make sure family members you wish to include are and that others are not. - Financial situation
Your estate plans can be upended if there have been changes in your assets, where the assets are located and how the assets are titled. If a house was to go to one family member but that house has been sold, you may wish to make an alternate provision. If you have bought, sold or promised to a family member artwork, jewelry or an item of sentimental value, be sure this is reflected in your will? - State of residence
The state of your residence controls many of the legal requirements for estate planning documents. If you have moved to another state since your current documents were written, a review by a local attorney will ensure your documents comply with the laws of your newly adopted state. - Health issues
Health issues of loved ones may require updates to your estate plan. Addictions, mental disabilities or the onset of dementia may necessitate a trust be established so that the assets received are prudently managed and not subject to fraudulent conduct. - Tax laws
A thorough review of your estate plan documents should include updated estate tax laws. The amount of the estate tax exemption has changed recently which may affect your plan. If you are including charitable gifts as part of your plan, there are certain assets that, if left to charity, can result in substantial tax savings.
Reviewing Other Documents That Should Be Part of an Estate Plan
Your estate plan should include documents appointing an individual to oversee your financial affairs if you are unable (a financial power of attorney) and an individual to make medical decisions should you be unable (a medical power of attorney). Often the person appointed is a spouse or child, but if they have passed away or moved, you may need to re-evaluate who is best to serve in these important roles.
It Will Be Easier Than You Think
If you’ve procrastinated in reviewing your estate planning documents, you are not alone. It is not something that most of us want to do. However, a periodic review ensures your family will have an orderly process when the time comes, and you can be confident your assets will end up with those you wish to have them.
For information on how a bequest may benefit you and your family, download our complimentary Estate Planning Guide or contact the Office of Planned Giving at (617) 643-2220.
