1. Consider any major changes in your life since you last updated your estate plan.
Have you experienced any of major life changes that might affect your estate planning, and require a revision to your current plan? For example, adopted or had a child? Got married or divorced? Had a death in the family? Had a major change in your financial situation? Had a death in the family?
2. Review your will, healthcare directive, and/or trust.
Some individuals have only a will, others might have, in addition to a will, a healthcare directive/Power of Attorney, and a trust. These documents will instruct how your property will be handled after your death and/or who will make your medical decisions in the event that you are unable to do so. These are the most critical parts of these documents which warrant your regular review.
a. Personal Representative (also known as the Executor) and Trustee designations.
The individuals and/or institution you name should be carefully considered. You should select someone who you trust to handle your affairs responsibly. If you designate more than one individual Trustee, consider whether they get along and will be able to work together. You may also want to consider designating a corporate Trustee, either to serve with a specified individual Trustee or to serve as sole Trustee if none of the individuals you name are able to serve. For instance, you want your children to serve as Trustees, but you don’t think one or all of them is financially responsible, it may make sense to name a corporate Trustee to serve with your children. A corporate Trustee brings expertise and resources to the table that an individual Trustee usually cannot provide, but will typically charge significantly higher rates than individual Trustees. If you are designating individual fiduciaries, it is important to inform them in advance of your desire to name them in your estate planning documents and to discuss with them the responsibilities such a position may entail. Finally, it is a good idea to discuss with your Personal Representative or Trustee your reasoning for any “out of the ordinary” provisions you may have included in your documents, such as disinheriting a child or making unequal distributions among children.
Another critical part of any estate plan is to review who is designated to receive your property after your death. This will insure that you designations remain up to date. Do you still want that friend you have not seen in 5 year to receive the $10,000 you designated 5 years ago? Does your child still owe money on that loan you refer to in your documents?
c. Gifts of Specific Property.
You also want to take into account any specific item of property, such as a family heirloom or jewelry, which you want a particular person to receive, you should update your estate documents to incorporate that gift if you have not already done so. Many states allow you to specify such a gift in a list separate from your will or trust, while other states require that it be specified in the document itself. People are also specifying who should receive their pets upon their death and sometimes even provide a fund to pay for the pet’s care. If you wish to provide for your pets, your will or trust should be updated with specific provisions that reflect your wishes.
3. Review your Financial Power of Attorney.
This is one of the most important documents because it allows the person you name as your attorney-in-fact to act for you in a wide array of financial and business matters. It is important to review who is named as your attorney-in-fact regularly to make sure that this person continues to be someone you trust to deal with your bank accounts, sign your name to documents, and manage your financial affairs. If you decide to remove your current attorney-in-fact, you should also send a notice of revocation to that person, and recover any copies of your previous power of attorney they may have in their possession. You should also review when your power of attorney becomes effective, is it only if/when you become unable to handle your financial affairs, and consider whether the designation you have made is still what you desire.
4. Review your Health Care Directive and Living Will.
This may be combined into a single document, although sometimes it is separated into two. Your health care directive appoints one or more individuals to make health care decisions for you if you are unable to make those decisions yourself, and your living will communicates to your doctors your wishes for end of life care if you have a terminal condition. Review your health care directive and confirm the person(s) you have appointed as your attorneys-in-fact in this document are still people you trust to make major medical decisions on your behalf, and that are mature enough to handle such responsibility.
You may want to consider that at least one of the persons you appoint live in the same town or state as you, rather than someone who lives across the country and would be less accessible in the case of an emergency. It would also be wise to review the wishes you have expressed in your living will for your medical care. Medical advancements change from year to year, and what you considered in the past may change with these advancements. Finally, you should always discuss your wishes with the person(s) you have appointed as your attorney(s)-in-fact.
5. Review the Beneficiary Designations on your Insurance and Retirement Plans.
One final suggestion, the same way you periodically assess the beneficiaries of your will or trust, you should also review and assess the beneficiary designations on your life insurance and retirement plans. Many people often overlook these designations when updating their estate plan. This oversight may result in continuing to have a person as a beneficiary on your life insurance and/or retirement plan after you have disinherit them from your trust and/or will.