As the year moves into fall and 2020 looms closer, it may be a good time to consider an estate planning checkup before the year ends. A thorough review of your estate plan should happen every 5 years or so, or sooner if there have been significant changes in your life. Such changes might include death, divorce, or a change in finances. If you haven’t taken a look at your documents in a while, now is the time.
While reviewing your documents, pay attention to your Power of Attorney and Advance Healthcare Directive and ask yourself relevant questions, such as the ones outlined below.
Regarding your Power of Attorney, ask yourself if the named agents are still able and willing to act on your behalf. Would they be able to manage your finances if you can’t? Are they still healthy enough to take on that responsibility? Have changes in their lives occurred that might impact their ability to serve? Are they familiar enough with your situation to know what they would need to do? For example, do they know where you bank and the name of your financial advisor? Do they have a copy of the document in the event they need it? And, if they don’t have a copy, do they have the contact information of your attorney?
When considering those named as healthcare surrogates in your Advance Healthcare Directive, the same questions apply, but you should also consider how much this person knows about your current healthcare situation, and whatever needs you may have. Healthcare needs can change significantly in 5 years, and there may be things that you haven’t shared with your named surrogate that they need to know. Do they know who your physicians are, what medications you take, and your preferred hospital? Are they knowledgeable enough to make a medical decision, and possibly an end-of-life decision, for you based on your current beliefs and desires? Have their beliefs changed in a way that could cause them concern in following your known wishes?
Both of the above documents should be reviewed by you, and then by your attorney, to see if there are any changes in the law, or changes in your specific situation, that would warrant an update.
When reviewing your will, make sure those named as Personal Representatives (executors) in your document are still able and willing to act. The usual time to update a will is if there is a life-changing event, such as: the death of your spouse, your spouse’s being diagnosed with a serious illness, the loss of a named beneficiary, or a change of heart regarding the disposition of your assets upon death. Oftentimes I find clients haven’t updated their documents since they named guardians for their minor children, who are now adults with children of their own.
For clients with revocable trusts, I suggest reviewing the assets in their trusts and making a list of any newly-acquired assets that are not owned by the trust. Retitling those assets so that they are owned by the trustee of your trust will avoid those assets passing through probate at death. Failure to fully fund your trust during your lifetime will require a court order to move any outside assets into your trust before they can be distributed to your beneficiaries.
When reviewing a will or trust, think about your beneficiaries and their current situations. If a beneficiary is on public benefits, an outright distribution could result in a loss of benefits. To prevent this, amend your document to include a Special Needs Trust. If adult children are going through financial troubles, a trust under your will can be used to avoid creditors from attaching the inheritance. Do you want to include distributions to grandchildren now that your children are adults? Do you have a favorite charity or organization that you now wish to include in your estate plan?
A quick review of your documents will either give you peace of mind that all is well, or let you know that it’s time to meet with your estate planning attorney to effect changes that reflect your current situation and desires.
Author: Teresa K. Bowman, Of Counsel