October 1st, 2023 |

• Estate Planning

By Attorney Al Spiegel

Reading Time: 3 minutes

As 2023 nears its end, every adult should take the time to review their estate plans to ensure their legal and practical relevance. The people named in various documents may or may not be the right people to inherit property or make decisions in the event of incapacity or death. Additionally, document legality might have changed since their creation.

To address these concerns, ponder the following five questions and take any necessary actions:

1. Has the estate plan been prepared or professionally reviewed within the last 5-7 years?

While estate planning attorneys design wills, trusts, and related documents to withstand various life changes, a comprehensive review of each estate plan every five to seven years holds merit for several reasons. First, clients often struggle to recall intricate plan details after even a couple of years, let alone five. A periodic refresher can realign intentions with the actual plan. Second, the composition of asset portfolios can evolve, potentially necessitating a reevaluation of distribution strategies. Third, shifting relationships due to death, divorce, and evolving social circles can influence the relevance of an individual’s estate plan. Lastly, changes in laws and practices can impact the plan’s efficacy.

For individuals lacking an estate plan, state-enacted laws will determine the handling of their estate in the event of their death or incapacitation. Delving into these laws often highlights the need for a personalized plan tailored to individual needs.

2. Is all property correctly titled?

Over seven years, asset compositions, from real estate to vehicles and financial holdings, can change significantly. As such, ensuring accurate property titling that aligns with the overarching estate plan is crucial. For instance, if you have an estate plan that divides property among three children but have a jointly owned bank account with one of them, the bank account would solely belong to the joint-owner child, contrary to the plan’s intent.

3. Do all accounts have proper beneficiary designations?

The weight of beneficiary designations cannot be overstated. Often, they take precedence over other elements in an estate plan, impacting who receives and manages assets post-death. Many clients have prepared elaborate wills or trusts with elaborate divisions of their estates, only for their families to find out that they forgot to remove a beneficiary designation that leaves the language of the will or trust completely powerless.

4. Have any beneficiary’s circumstances changed since the original estate plan was prepared?

Personal circumstances rarely remain unchanged over seven years. Births, deaths, marriages, divorces, health changes, and financial shifts are all bound to happen. A periodic reevaluation of the estate plan is necessary to ensure its alignment with the evolving realities of beneficiaries’ lives.

5. Does the client understand the purposes, mechanics, and requirements of the estate plan?

A recurring scenario in estate planning is that clients return to the office years later with little to no idea of what their estate plan is and how it works. This can be likened to asking a car owner about repairs conducted by a mechanic five years ago. In most cases, the owner recalls the impact those repairs had on their driving experience rather than the technical details. Similarly, estate plans often fade from clients’ memories over time. To be sure the true goals of the plan have not been replaced with false understandings, an overall review is a good if not necessary idea.

With these questions, anyone can determine if further attention is needed for an estate plan.  If it is, be sure to seek the counsel of an experienced estate planner who can assess the client’s specific situation and make recommendations to be sure that the client’s wishes are carried out.