So you have gone through all of the work to get your estate planning documents finalized, you have had your signing meeting with your attorney, and now it is time to celebrate that you are done, right? In most cases, the answer is not quite yet. There are few items that are often overlooked that are essential to truly finishing your estate plan. I have listed two of the most important items below:
- Check Your Beneficiary Designations – Immediately after you finalize your estate planning documents, you should contact your financial advisor, retirement account administrator, insurance agent, bank, and anyone else that holds your financial assets. The reason? Making sure that these financial assets have up-to-date (and properly filled out) beneficiary designations. These forms are crucial, as they will ensure that upon your death, your financial assets transfer directly to your beneficiaries. Particularly if you have a Trust, properly funding the Trust with your financial assets is important to successfully carrying out any estate tax deferral or minimization components of your estate plan. Your attorney can walk you through the necessary steps to accomplish this final part of the process.
- Make Sure Your Personal Property List Is Current – A lot of clients are quick to ignore their miscellaneous personal property (such as furniture, household effects, family keepsakes, etc.) because they do not necessarily think of these items as having significant monetary value. However, we have often seen that, particularly in contentious families, these items hold significant value to certain family members, and can become the source of conflict. Accordingly, I advise clients to expressly address these items in their Wills and Trusts, typically using one of the following approaches: (i) designating the beneficiary of these items directly in the Will or Trust, or (ii) designating the beneficiary of these items in a separate list referenced by the Will or Trust. I especially like the second approach, as it is more flexible and cost-efficient since the client can change the list over time without having to arrange for the attorney to formally update the estate plan.
Thinking through these items will ultimately result in getting the most benefit and value out of your estate plan. If you have any questions or concerns about finalizing your estate plan, please contact Alex Zucco in the Grand Rapids, Michigan office at 616-336-1009 or by email at email@example.com, or any other member of the Dickinson Wright Trusts and Estates Practice Group.
The Coronavirus (COVID-19) Pandemic has impacted every corner of the world at this point. As medical experts, financial advisors, and our colleagues that specialize in healthcare law, employment law, and other related areas are busy advising clients on the best course of action for the weeks and months ahead, we – as estate planners – also want to remind our clients and friends of some important considerations during these uncertain times.
At this point, we would simply promote the following actions to ensure that your estate planning affairs are in order:
(1) Review your existing documents. Make sure that you have copies (either paper or electronic) of your existing estate planning documents, and review them to confirm that they still reflect your wishes. If you cannot locate your documents, consider calling or emailing your estate planning attorney to obtain copies.
(2) Pinpoint any items that require attention sooner rather than later. As you review, take note of any major changes that may have occurred in your family since you last updated your estate plan. These might include child births, deaths, marriages, divorces, etc. And also consider whether the individuals that you previously appointed to serve as your agents are still appropriate.
(3) Follow up with your loved ones and advisors.
- Make sure that your loved ones know if you have appointed them to any role in your estate plan. This includes your executor (i.e. personal representative under your will, or trustee of your trust), guardian for your minor children, attorney-in-fact under your financial durable power of attorney, and patient advocate under your health care power of attorney.
- Consider reaching out to your financial advisor, insurance advisor, etc. to ensure that your beneficiary designations are up to date and discuss any new planning opportunities relative to your current financial status.
- If you require any medical attention in the near future, confirm that your medical provider has a copy of your patient advocate designation and is informed as to who you wish to have access to your confidential health information.
NOTE – If you do not already have an estate plan, now is as good of a time as any to consider the opportunity before you. Having a will/trust, a financial durable power of attorney, and a healthcare power of attorney can certainly contribute to a healthy state of mind.
I hope that by taking these steps, you are able to ease anxiety and find solace in knowing that you have planned ahead and addressed your risks and concerns. If you have any questions or concerns about your estate planning affairs, please contact me (firstname.lastname@example.org) or any other member of the Dickinson Wright Estate Planning Practice Group.
Preparing an estate plan can be a lot of work, both for the planner but especially for the client. And when that process is over, and the plan has been properly put in place through effective trust funding and asset titling, it is common for the client to not think about the plan again for years at a time.
Generally speaking, we recommend that clients review their planning every three to five years. But, there are very specific family and financial events that may occur during that time that make updating the estate plan crucial. Marriage or divorce, the death of a spouse, the birth (or death) of a child or grandchild, the marriage (or divorce) of a child, significant increases (or decreases) in personal wealth, receiving a substantial inheritance or gift, the sale (or acquisition) of significant business assets, moving to another state, and changes in clients’ relationships with their personal representatives, trustees, or other appointees, are just a few of the most common events that should motivate clients to review their estate planning documents.
Additionally, changes in the law, both at the state level and at the federal level (particularly with regard to the tax code), also should spur a review of the estate plan. We as planners do our best to notify existing and former clients on these types of changes, but it is not feasible to contact everyone that might be affected. For example, the significant changes to the estate tax exemption in the last decade, especially with the passage of the Tax Cuts and Jobs Act in late 2017, have made simplifying estate tax-driven plans much more common.
If you have any questions about updating your own estate plan or advising clients on updating their plans, please contact Alex Zucco (616-336-1009) in our Grand Rapids office or one of our other estate planners in our North American offices.