Does your estate plan cover everything? Are you sure? To ensure that your wishes are carried out after you pass on, review your estate plan to confirm that you have not overlooked any of the essential items:
1. Financial power of attorney. Many people do not realize that having a financial power of attorney is an essential part of their estate plan. Although an estate plan is focused on what happens after you die, it is important to also plan for if you are disabled or unable to make your own decisions. When you appoint a power of attorney, it allows him or her to handle your finances and make decisions regarding your assets if you are unable to do so for yourself.
2. Advanced medical directive. While you are healthy, you should take the time to make your medical wishes known. This can save your family members from the heartache of having to make those decisions for you, especially if they are not sure of what you would want done.
3. Update your executor/beneficiary designations. If you are one of the people who drafted their estate plan and then forgot about it, take the time to review it now. Is your appointed executor still correct? Do you need to add, remove or change beneficiaries? Do you want assets held in trust until some of the beneficiaries reach a certain age?
4. Review your life insurance policies. If you have owned a life insurance policy for several years, it is important to review them to confirm your coverage will provide as you intended. You should also ensure that your beneficiaries are still correct, that no liabilities have developed, and that your policy is properly funded.
5. Review your trustee designation. If you have a trust and you appointed a close family member or friend as the trustee, have you given them the instructions on what their job entails? Do they have a copy of the trust document? Do they understand they will have fiduciary duties? Being a trustee is a significant burden to put on someone, so it is critical that you discuss it with the person you appointed. You may also want to consider appointing a third- party, such as a bank, to act as trustee.
6. Check estate tax exemptions. Failing to review and update your estate plan every few years can be a very costly mistake when it comes to tax exemptions. If you have significant wealth, you should confer with your attorney and take advantage of planning opportunities that you may not be aware of.
7. Plan for the distribution of personal effects. To prevent confusion and fights among your family members, take the time to outline how you want your personal effects to be distributed. Who should get your engagement and wedding rings? Grandma’s dishes? Grandpa’s coins? How should family heirlooms be divided? Even items that are not worth much money, but have sentimental value, can cause fights if you do not state how you want the items distributed. If you have already executed your will, ask your attorney to draft a codicil specifying how you want your personal effects to be distributed.
It is common for people to draft their estate plan and, considering it handled, forget about it. However, in order to take full advantage of the estate planning process, it is important to review your plan with your attorney every few years. Contact The Nice Law Firm for assistance in drafting your estate plan, or if you already have a plan in place, reviewing it to ensure you are getting the full benefit of your hard work in preparing it.
Note: The recent pandemic has dramatically increased awareness of the need for estate planning — for all ages, not just the elderly. Yet, current conditions do not permit the scheduling of a traditional office visit.
We want you to know that we are at work every day and that The Nice Law Firm has the technology available to have a “face to face” meeting without meeting in person.
Using the telephone, email, and Zoom video, we can meet and listen to your concerns, on your schedule, in the convenience of your own home.