As the calendar turns to a new year, many of us set resolutions for personal growth, health, and finances. But amidst these aspirations, there’s one crucial area that often gets overlooked: your estate plan. January offers a perfect opportunity to not just dust off those important documents, but to actively review and update them to reflect your current life circumstances and goals.
An estate plan isn't a "set it and forget it" item; it's a living document that should evolve with you. Life changes—marriages, births, divorces, new assets, changes in beneficiaries, or even just shifts in tax laws—all necessitate a fresh look at your plans. Being proactive now can save your loved ones significant stress, time, and expense down the road.
Key Areas to Review in Your Estate Plan
1. Your Will or Living Trust
These foundational documents dictate how your assets will be distributed and who will manage your estate.
- Beneficiaries: Are all your named beneficiaries still current? Have there been any births, deaths, marriages, or divorces that would impact who you want to inherit from your estate?
- Executors/Trustees: Is the person you've appointed to manage your estate still the right choice? Are they willing and able to serve? Do you have suitable backups?
- Asset Funding: If you have a living trust, are all your assets properly titled in the name of the trust? This is a common oversight that can undermine the trust’s effectiveness.
2. Powers of Attorney
These documents are vital for ensuring someone can make financial and medical decisions on your behalf if you become incapacitated.
- Durable Power of Attorney for Finances: Does the agent you’ve named still align with your wishes? Are their contact details current?
- Advance Healthcare Directive (Medical Power of Attorney): Have your healthcare wishes changed? Is your appointed agent still the best person to make medical decisions for you? Ensure that your doctors and family are aware of this document and know where to find it.
3. Beneficiary Designations
Many assets, such as life insurance policies, retirement accounts (401 (k), IRA), and even some bank accounts, pass directly to named beneficiaries, superseding your will or trust.
- Review All Accounts: Systematically check the beneficiary designations on all your financial accounts and insurance policies.
- Contingent Beneficiaries: Make sure you have designated contingent beneficiaries in case your primary beneficiary predeceases you.
4. Guardianship for Minor Children
If you have minor children, designating a guardian is one of the most critical decisions in your estate plan.
- Confirm Your Choice: Is the guardian you’ve chosen still the most appropriate person to raise your children? Have their circumstances changed?
- Discuss with Guardian: Have you discussed this responsibility with your chosen guardian and ensured they are willing and able to fulfill their role?
5. Digital Assets
In our increasingly digital world, don't forget your online presence.
- Inventory: Create an inventory of your digital assets (social media, email accounts, online banking, cryptocurrency, etc.).
- Access: Consider how you want these assets managed or closed down and provide instructions or access details to your executor.
6. Location of Documents
It's not enough to have an estate plan; your loved ones need to know where to find the original documents.
- Secure Storage: Keep originals in a secure, fireproof location.
- Inform Key Individuals: Let your executor, trustee, and close family members know where your important documents are stored and how to access them.
Take Action This New Year
Don't let another year pass without ensuring your estate plan is robust and up to date. Taking the time now to review these crucial elements provides peace of mind, knowing that your wishes will be honored and your loved ones protected.
For expert guidance in reviewing and updating your California estate plan, contact Gilfix & La Poll Associates LLP today. Our estate attorneys in Palo Alto are ready to help you ensure your legacy is secure for the new year and beyond.
Call us at (650) 683-9200 to schedule a consultation.