7 Important Things to Review in Your Estate Plan Before the Year Ends
As the year winds down, many of us start thinking about what we want to accomplish before January arrives. We make lists, organize our finances, prepare for the holidays, and think about the goals we want to carry into the new year.
But there is one important item that often gets pushed to the bottom of the list: your estate plan.
If you already have a trust, will, or other estate planning documents in place, you may feel like you’ve checked that box. And while having an estate plan is an important first step, it is just as important to make sure your plan continues to reflect your life, your wishes, and the people you want to protect.
Life changes. Families grow, relationships evolve, assets are acquired or sold, and the people you once selected to make important decisions may no longer be the right fit.
Before the year ends, take a few minutes to revisit these seven important areas of your estate plan.
1. Review Your Beneficiary Designations
One of the easiest things to overlook is the beneficiary information associated with your financial accounts.
Retirement accounts, life insurance policies, annuities, and certain other financial accounts may pass directly to the beneficiaries listed on the account, regardless of what your trust or will says.
Ask yourself:
- Are your current beneficiaries still the people you want to receive these assets?
- Have there been marriages, divorces, births, or deaths in your family?
- Are any beneficiaries minors or individuals who may need additional planning?
- Have you reviewed both your primary and contingent beneficiaries?
An outdated beneficiary designation can create unintended consequences. Reviewing these designations regularly helps ensure they coordinate with the rest of your estate plan.
2. Make Sure Your Trust Is Properly Funded
Creating a revocable living trust is an important part of many estate plans, but signing the trust agreement is not necessarily the final step.
Your trust generally needs to be properly funded, which means transferring appropriate assets into the trust or otherwise coordinating them with your estate plan.
Depending on the asset, this may involve updating ownership or title records, reviewing beneficiary designations, or confirming that the asset will be handled according to your overall plan.
Take a moment to consider:
- Are your real estate properties properly titled?
- Have your financial accounts been reviewed for appropriate ownership or beneficiary designations?
- Have you acquired any significant assets since your trust was created?
- Have you purchased or sold property that may require an update to your plan?
An unfunded or improperly funded trust may not accomplish everything you originally intended.
3. Revisit Your Successor Trustees and Decision-Makers
When you created your estate plan, you likely selected people you trusted to step in and help if you became incapacitated or passed away.
But are those still the right people?
Your successor trustee, financial agent under your Power of Attorney, and healthcare agents may have been excellent choices at the time. However, circumstances can change.
Perhaps someone has moved away, experienced a significant life change, become unavailable, or simply may no longer be the best person for the responsibility.
Consider whether your selected individuals are still willing, able, and appropriate to serve in these important roles.
You may also want to review your backup selections. Having an appropriate alternate in place can help avoid unnecessary complications if your first choice cannot serve.
4. Update Your Healthcare and Financial Documents
Your estate plan is about more than what happens after you pass away. It also addresses who can help make important decisions if you become unable to make them yourself.
Your Financial Power of Attorney and Advance Health Care Directive are particularly important.
Your Financial Power of Attorney identifies someone who may act on your behalf regarding financial and legal matters, subject to the authority granted in the document.
Your Advance Health Care Directive allows you to express your healthcare wishes and designate someone to make healthcare decisions on your behalf if you are unable to do so.
Ask yourself:
- Does your healthcare agent understand your wishes?
- Is your financial agent still someone you trust?
- Do your documents reflect your current preferences?
- Do your loved ones know where to locate these documents if they are needed?
These documents are most valuable when they are current, accessible, and understood by the people who may need to rely on them.
5. Account for Changes in Your Family or Financial Circumstances
A lot can happen in a year. Sometimes, a lot can happen in just a few months.
Marriage, divorce, the birth of a child or grandchild, a death in the family, a business venture, or a significant change in financial circumstances may all warrant a closer look at your estate plan.
For example, perhaps you established your trust before welcoming another child or grandchild. Maybe you acquired a vacation home, started a business, or experienced a change in your family relationships.
Your estate plan should grow and evolve alongside your life.
Even if you do not think a major change has occurred, reviewing your plan periodically can help identify provisions that may no longer reflect your intentions.
6. Review How You Want Your Assets Distributed
It is easy to focus on who will receive your assets without taking enough time to consider how and when they will receive them.
Your trust may include provisions for distributing assets outright, holding assets in continuing trusts, or making distributions at certain ages or milestones.
Consider whether your current distribution provisions still make sense.
For example:
- Have your children or grandchildren reached adulthood?
- Would certain beneficiaries benefit from receiving assets in a continuing trust rather than outright?
- Have your thoughts changed about how you want your assets distributed?
- Are there individuals who may need additional planning or protection?
Your estate plan should reflect not only who you want to benefit, but also how you want your legacy to be managed and protected.
7. Make Sure Your Loved Ones Know Where to Find Your Documents
Even the most thoughtfully prepared estate plan can become difficult to administer if no one knows where to find it.
Your successor trustee and other trusted individuals should have a general understanding of where your important documents are located and whom to contact when the time comes.
Consider organizing:
- Your trust and related estate planning documents
- Financial and healthcare powers of attorney
- Advance Health Care Directive
- Asset and account information
- Insurance policies and beneficiary information
- Contact information for your estate planning attorney and other professional advisors
You do not necessarily need to share every detail of your estate plan with everyone. However, making sure the appropriate people know where to find important information can make a meaningful difference when it is needed.
A New Year Is a Great Time for a Fresh Look at Your Legacy
Estate planning is not a one-and-done project. It is an ongoing process that should change as your family, finances, and priorities evolve.
As you make your end-of-year checklist, do not let your estate plan become an afterthought. A little attention today can help prevent confusion, unnecessary complications, and unintended outcomes for the people you love tomorrow.
At Snyder Law, we help individuals and families create, review, and update estate plans designed around their unique goals and circumstances.
If it has been several years since you last reviewed your estate plan, or if you have experienced significant life changes, now may be a good time to revisit it.
Ready to make sure your estate plan is still working for you? Contact Snyder Law to schedule a conversation with our team. Let’s make sure your plan is ready for whatever the next year brings.
The information in this article is provided for general educational purposes only and is not intended to constitute legal advice. Every family’s circumstances are different, and you should consult with an attorney regarding your specific situation.
