A great time to review your estate plan is December, the last month of the year. A year can change a great deal in one’s life: a job change, a marriage, birth or death in the family, property increase, inheritance received. Having an updated estate plan is essential for the management and transfer of your wealth for tax and non-tax reasons.
The following is a step by step process of how to review your estate plan, to identify if any changes need to be made.
Step 1: Review your Estate Planning Documents – Review the writing in your documents which make up your estate plan. Read each document to ensure that the writings still echo your wishes for the disposition of your assets. Questions to ask yourself during the process include:
- Have you gotten married or divorced in the last year?
- Has there been a birth or death in the family?
- Are there any other changes to the family structure since last year?
- Have you changed your state of residence?
- Have your beneficiaries changed?
- Are your beneficiaries capable of handling wealth?
- Are you content with how your assets are to be distributed?
- Have your assets increased so much that Federal Tax Planning may be needed?
- Have you purchased assets in another state?
- Have you received inheritance in the past year or are planning to receive it?
- Are your assets titled appropriately to work with your estate plan?
- Are the beneficiary designations on assets like life insurance and individual retirement accounts current and working properly with your estate plan?
While less than exciting, incorporating an estate plan review into your annual chores is a great way to ensure that your assets will be distributed in accordance with your wishes and changing circumstances. It is also a great way of ensuring that there are no “surprise” tax bills upon one’s passing for which estate assets may have to be sold. Whether you choose to review in December or any other month, by keeping it on your radar and moving on it, you are protecting your own and your loved one’s interests.