Many people procrastinate when it comes to estate planning. Typically, people only draft a will when certain life events happen, such as having children, getting married, buying a house, owning a substantial business, or being encouraged by their spouse.
Don't forget that the first and most crucial step in ensuring your affairs are in order is to have the essential estate documents in place. These include a Will, a Power of Attorney, a Living Will, and a Health Care Directive. Additionally, it's important to review how your assets are titled and understand where and how your property will be distributed. Take the time to review your insurance coverage as well.
If there haven't been any significant changes, such as the birth of a child, divorce, marriage, death of a family member, change in jobs, or change in your financial situation, it is recommended to review your estate plan approximately every five years. Another important factor to consider is reviewing your estate planning documents in light of any changes in tax laws that may impact your estate planning.
Reviewing your estate plan involves sitting down with your attorney to discuss your goals and objectives given your current situation. You'll analyze whether your current documents align with these goals and ensure that your property goes to the intended recipients and that your insurance is in place to protect your loved ones. Additionally, you'll verify that the titles on your assets and the beneficiaries are optimized. You may discover that certain changes are necessary, such as updating the executor, guardians, trustees, asset titles, beneficiary names, implementing tax planning to minimize estate taxes, or taking steps to avoid probate.
To assist with your estate planning review, I have included a checklist covering important considerations for common estate planning documents:
- Wills
- Living Trusts
- Irrevocable Trusts
- Powers of Attorney