Updating Your Estate Plans: A 10-Point Checklist

You probably felt real satisfaction and peace of mind when you had made your will and completed your related estate planning. You felt that now your intentions would be carried out exactly as you specified, your estate used as you wished, and your beneficiaries protected.

The same crucial goals, of course, apply to keeping your estate planning up to date. Most of us are aware of that, but we don’t always realize how many types of changes can affect estate plans, significantly changing—or even overturning—what happens to our good intentions when the time arrives for them to be carried out.

Regular review of your estate plans

All legal and financial professionals recommend a regular review of estate plans and updating as soon as it is required by changing circumstances. Births into the family, deaths, marriages, divorces, and remarriages all are obvious “turning points” and occasions for reviewing your estate with an attorney. Too often, of course, we know this, but put off doing it. There are consequences:

First, changes accumulate and tend to make the prospect of updating estate plans a bit more daunting as time passes, and so lead to procrastination.

Second, if the unexpected occurs, as in lives at some point, and your intended estate changes never get made, your initial good intentions in planning your estate may not be carried out as you wish. That can result in the waste of assets earned and guarded over a lifetime, occasion extended uncertainty in families, and leave heirs without the benefits you intended.

Life “turning points,” however, are far from the only changes that can require prompt attention to your estate. For example, federal and state tax laws change, laws bearing on estates change, the amount or nature of your assets change, and, of course, your intentions, the situation of your intended beneficiaries, and your situation (e.g., retirement) change, as well.

Some reasons for revisiting your estate plans

Here is a checklist of common reasons for revisiting your estate planning. It is far from complete but reminds us of the diverse factors that may be involved. At an annual estate-plan review, your attorney will raise all issues relevant to your circumstances.

  1. Births, deaths, marriages, and divorces.  These almost always imply estate changes. In addition, however, family members often are in the role of executors, trustees, individuals with the power-of-attorney, or health-care decision-makers in your will, trusts, or other estate instruments. As the situations of these family members change, and perhaps your relationships, you will want to review implications for your estate.
  2. Long-term care. As we live longer, on average, and costs of long-term care become potentially very significant, your estate plans to assist family members might take cognizance of their long-term care needs. This might enter into your revised estate plans, for example, if someone expected to provide such care dies. Your own long-term care wishes may change over time, including the kind of care setting you prefer.
  3. Retirement. As retirement spending, perhaps unexpectedly large expenses, change your assets, including, for example, your IRA funds, you may need to change the balance of such assets between your estate and for your own expenses.
  4. Businesses. Any business in which you have an interest should be managed to minimize taxes during your lifetime but after it. Your choice of the structure of your business (sole proprietorship, LLC,  partnership) will have implications for your beneficiaries.
  5. Financial assets, including stocks. As the basis of your estate, your portfolio investments are a prime concern. They will tend to change in size with the market and other factors. The list of these and other assets and liabilities should be updated annually with your estate planning attorney. Tax-law provisions for making gifts during your lifetime to family members (often children and grandchildren) can reduce or eliminate estate taxes on your death. The creation of trusts may further protect your beneficiaries by putting management of their legacy in the hands of legal and financial professionals.
  6. Philanthropic interests. As your concern for and relationship with charities develop and change, you can keep your plans for assisting them on track with regular updates, creation of charitable trusts, or use of other planning vehicles that offer a host of possible tax benefits.
  7. Life insurance. Depending on the size and type of life insurance policy that you buy, and its intended beneficiaries, you may consider putting the policy in a life insurance trust. When you create an insurance trust, you will want to include in your annual estate review compliance with its annual tax requirements.
  8. Trusts. We have noted a few occasions for considering a trust as part of your estate planning. To include assets in your trusts, they must be put in the name of the trust (“retitled”) for the trust to control them. Such assets might include real property you purchase, life insurance policies, or retirement accounts. Retitling is easily done at your annual estate planning review.
  9. Your living will. You likely set up a living will with your estate plan. Review it periodically to ensure that all your wishes are made clear. Your attorney can outline the choices to consider.
  10. Guardians. As your family changes, with children growing up and your relationships with relatives changing, you may want to review your designation of your children’s guardian. If your preferences do change, make the estate changes promptly. A related consideration may be a “successor guardian” named in your estate plan in case your chosen guardian is no longer able or willing to serve in that role.

Your professional legal-financial advisor can work with you and your family to ensure that your estate plans are complete, comply with all laws, and up to date.  Schedule a regular annual meeting for review and updating.

You can get in touch with Tanko Law to answer your questions about any aspect of estate planning and how we can work with you at each step, clarifying your options, addressing your special concerns, and ensuring fully legally compliant documents.

Check back here regularly for information, insights, and updates on all legal matters and best practices for managing them.

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