You’re probably thinking that reading legal documents does not sound like an enjoyable way to start a new year, but it doesn’t have to be as unpleasant as it sounds.
Reviewing your documents doesn’t mean you have to read them cover to cover, but it is important that you are still comfortable with the designations you have made.
Below is a basic checklist of items we suggest you review annually:
- Assess life changes since you last updated your estate planning documents. Have you gotten married or divorced? Had a child or adopted a child? Moved to a different state? Had a death in the family? Had a major financial event? Any of these life changes might affect your estate planning, and your documents might need to be revised.
- Wills and trusts. Some individuals have only a will, while others have both a will and a trust. Regardless, one of these documents will direct where some or all of your property will go upon your death.
- Personal representative, trustee designations. Individuals and institutions that you name should be those you consider responsible and trustworthy.
If you designate more than one individual trustee, consider whether they get along and will be able to work together.
If you are designating individual fiduciaries, it is important to inform them in advance of your desire to name them and to discuss with them their responsibilities.
- Beneficiaries. It is important to review who is designated to receive your property after your death, including any monetary gifts you might make, to ensure these designations remain up to date.
- Gifts. If there is any specific item of property, such as a family heirloom or jewelry, you should update your documents accordingly. Many states allow you to specify such gifts in a list separate from your will or trust, while other states require that it be specified in the document itself.
- Financial powers of attorney. This document allows the person you name as your attorney-in-fact to act for you in the event of incapacity.
It is essential to review who is named as your agent regularly to ensure that person continues to be someone you trust.
- Health care powers of attorney, living will. Health care powers of attorney appoint one or more individuals to make health care decisions for you if you cannot make those decisions yourself.
Living wills communicate to your doctors your wishes for end-of-life care.
Review your health care power of attorney to ensure the persons you have appointed are individuals you trust to make medical decisions for you and who are mature enough to handle that responsibility.
- Beneficiary designations. Last, but not least, you should review the beneficiary designations on your life insurance and retirement plans. These designations are often overlooked.
The last thing you want is to update your trust to exclude an ex-spouse or disinherit a child, then inadvertently leave that person as the beneficiary of your life insurance.
Rebekah N. Freeman is an associate attorney with Elder Law & Estate Planning Center.