After the notarization of the estate planning documents, it is tempting to just put your estate planning binder away in your drawer and not look at it again until something happens. However, it is important to periodically review the documents and complete a checklist to ensure that all of the details have been completed and the items are up-to-date.
First, it is important to review your Living Trust documents, Durable Power of Attorney, and Advance Health Care Directive on a regular basis. It is advisable to review the documents, at least once a year. It is helpful to set a yearly date on your calendar. During these reviews, it is advisable to review the following items:
- Choice of Trustee – Who have your named as your first, second and third successor trustee? Are these the individuals you still want to serve as your trustees? Are each of these named individuals able to serve in this role? If you had minor children when you created the trust and now they are adults, do you want to name them as trustees?
- Living Trust distribution – Does this distribution represent how you would want your estate distributed upon your death?
- Have you funded your living trust? – A crucial part of the estate plan is funding the living trust. This requires re-titling the proper assets into the trust. For example, all of your real property should be titled into the name of your trust. Bank accounts should be titled into the living trust, especially those which have balances of over $50,000. Additionally, assets such as brokerage accounts should be titled into the trust.
- Are your beneficiary designations up-to-date? It is important to review all of your beneficiaries for your 401(k), IRA, life insurance, and annuities? Have you named a primary and contingent beneficiary for each? Each year, it is advisable to review these beneficiaries to ensure that they represent your intent. Regardless of what is listed in your living trust, upon your death, the administrators for these accounts will distribute these accounts according to the beneficiary designation.
- For the Durable Power of Attorney and Advance Health Care Directive, it is important to review the named primary agent and successor agents. Are these the individuals that you want to serve in this role? Are they able to serve in these roles still? Do the instructions in your Advance Health Care Directive represent your wishes?
Your estate planning documents should change as your life changes. Thus, it is crucial to periodically review your choices to ensure that the documents accurately represent your wishes.
Source: Affinity Trusts. Not affiliated with KeyPoint Credit Union.