The new year often brings with it new resolutions. If you have an estate plan, resolve to have your plan undergo a checkup and ensure that all of the pieces that work together to comprise your total estate plan are up-to-date and consistent with your current wishes. Whether you've experienced deaths, births, divorces, marriages or other events, a life event can change your circumstances and may mean making alterations to your plan is in order. Simply checking up on your will and trust is not enough; you should also make sure that your powers of attorney, living will and non-probate accounts are also current with your existing estate planning goals.
As December draws to close, and the calendar turns to January, many people starting looking forward to the start of a new year. With the start of the new year will come new resolutions for many. If you haven't created an estate plan, you should resolve to do so. If you have, make getting an estate plan review one of your resolutions.
Making sure that the plan you have in place is completely up-to-date entails many things. One place to start is to ask yourself if you've experienced any important life events in the past year (or whatever length of time since your plan last underwent a checkup.) Have there been any deaths among your loved ones? New births? What about marriages… or divorces? Depending on how you've structured you plan, any of these events could impact you. Perhaps a new birth means making a change to ensure that your newest loved one is included in your plan, or a death means making alterations to your plan to redirect that deceased loved one's distribution.
One of the more common triggers is a divorce. A divorce has the potential to require a plan change for various reasons. The most obvious, of course, is if you desire to amend your plan to ensure that this person, post-divorce, receives nothing from your assets. However, in some situations, a former spouse (of yours or of a loved one) may remain an important and cherished part of your life even after the divorce. Should you still intend to include this person in your plan, a plan review is appropriate in this case, as well. This person likely has no legal relationship to you now, and it is important to make certain that your plan spells out your intentions and objectives regarding this person clearly and expressly.
Making sure that your plan is up to date involves more than just checking your will or living trust. A death may impact the your powers of attorney if the departed was one the agents you named under those documents. Altering or replacing these documents to ensure that you still have an ample number of agents and backup agents can ensure that these powers will work the way you want should they be needed.
Furthermore, remember that your estate plan extends beyond just your will, trusts, powers of attorney and living will. If you have assets that are transfer-on-death, pay-on-death or any kind of structure that has a death beneficiary designation, these assets need a checkup, too. Regardless of how your will or living trust is designed, or how up-to-date those documents are, accounts like your retirement accounts or your insurance policies will generally be distributed according to their own beneficiary designation forms, not your will or trust. Checking up on these accounts is particularly important if you've experienced a divorce (to make sure you're not unintentionally leaving assets to your “ex”.) It is also vital if you've experienced a death among your loved ones. If your death beneficiary predeceases you, and you do not fill out a new beneficiary designation form, that asset will likely end up in your probate estate, and could be distributed in a way far from what you intended.