Start the New Year off right by updating your critical estate planning documents. Find out what you should be looking at.
Most of us use the New Year to get started on something we should have done a long time ago: Start exercising. Eat right. Floss every day. Live every week like it’s the last week of our lives.
But it can also be a good time to keep up-to-date on the important things that we’ve already started. Brushing up on and reviewing your estate planning each January can be a smart move because it helps you remind yourself what you have designated in your will and the rest of your estate, and it allows you to make some necessary changes regularly to avoid inaccuracies in case something happens.
Review Your Designations and Appointees
A year is a long time in anyone’s life, and major changes can happen. It’s important to keep your estate up-to-date in accordance with your life now as opposed to your life when you started planning your estate.
Your will is the most basic component of your estate, and reviewing the designations indicated in your will can help you account for possible changes in your or family’s lives. You may wish to account for new children or recent deaths in the family, or you may decide to restructure some of your bequests (such as deciding whether or not a trust is necessary).
It’s also important to review the appointees indicated by your estate so that you can be sure that each person is still able to fulfill the responsibility that you originally designated for them. It’s important to take into consideration the responsibilities of your executor, trustee, and any guardians when applicable, as well as the people who will have durable power of attorney and serve as your health-care proxy. The people filling these important roles for you after death can change from time to time, so it is important to make sure that your choices reflect your current desires.
Consider Changes in Your Bequests
Just like changes in your life can affect your choices of people designated as beneficiaries in your will and appointed to fill various roles for your estate, such changes can affect the estate itself. If you have incurred larger-than-normal costs or added additional property to your estate, it makes sense to review it regularly to make sure you are assigning the right property to the right people.
In terms of probate property, you may wish to reallocate certain properties to different beneficiaries according to how much property is available. If you previously indicated smaller amounts to a few people (such as children) but recently came into a large sum of money, you will want to stay current with who is given what. Non-probate properties like insurance proceeds are also important to keep up-to-date.
It’s also important to take your non-material properties into consideration. Digital assets can cause confusion if no arrangements are made for them ahead of time, so reviewing your online presence every now and then can help you provide accurate instructions to your family. Be sure to make a list of all of your online accounts with their passwords, particularly those with automatic billing. With more and more important content being saved on sites like Facebook and Flickr, it’s important to make sure you are up-to-date on which accounts you operate and whom you would like to have access to them.
From a logistical standpoint, reviewing your estate can also help deal with estate tax law changes. Estate tax thresholds have decreased in recent years, making the transfer of large amounts of property to certain heirs more expensive, so you may decide to rearrange some of your bequests to avoid incurring additional costs for your heirs. You may also decide to restructure your estate to include trusts to avoid your property going through probate court.
The attorneys at Northern Virginia Trusts and Estates are located in Vienna, VA and offer comprehensive estate planning services for Virginia residents. If you want to find out more about our affordable estate planning packages click here.