Estate plans are living, breathing creations. Your life can and will change due to new births, children getting older and other shifts in the family; changes to your portfolio, career and business; and changes to your health, where you live and your core values. Likewise, external events, such as tax legislation passed in your state or the development of a novel financial instrument, can throw your plan off track or open the door to opportunities. It is important to remember that regular steps should be taken to ensure the estate planning strategy you’ve selected will maximize your peace of mind and protect your legacy.
Of course, you want to do due diligence without spending inordinate amounts of time mulling over your plan. Good enough should be good enough. To that end, ask yourself the following “stress test” questions to assess whether you need to meet with an estate planning attorney to update your approach:
1. When was the last time you updated your will or living trust? Since then, have you had new children or gotten divorced? Have you moved to a new state, opened or sold a business, or just changed your mind about the type of legacy you want to leave behind? Especially if big, tangible life events have occurred, strongly consider updating your documents as soon as possible against all else.
2. Who have you named as executor and trustee? If you had to start your planning over from scratch today, would you still make the same decisions? If not, why not?
3. Do you have adequate insurance? Many people do not have enough insurance for themselves or their businesses. They also fail to name contingent beneficiaries. Get your insurance policies in order.
4. How much of your property is jointly owned with someone other than your spouse? Jointly owned property has the potential to be double taxed. Take a look at your real property and seek advice on the proper adjustments to make in order to save on taxes when it’s really necessary to save on taxes.
5. How’s your record keeping? Nothing drives an executor crazy like sloppy record keeping.
6. When was the last time you gave your plan a thorough once-over? Even if nothing “huge” has happened in your life recently, if it’s been over five years since a qualified estate planning attorney has assessed your strategy, schedule a time to meet. Identify any issues, and iron out the kinks one at a time.
Again, these questions are meant to help you reduce stress, not increase it. If you are on top of your plan and have annual update meetings with your estate planning attorney, it is likely that your estate plan is up to date and accurate. Use these questions as a reminder and self-check. If you find this “test” causes you stress, contact your estate planning attorney to review and update your plan.