How Can I Clean Up My Estate Plan?
Chicago Business Journal’s recent article entitled “8 steps to tidy up your estate plan now” gives you some items to think about when working through your affairs.
First Setp to Clean Up Your Estate Plan: Make certain that your plan is accurate and up to date. Your basic documents, which include your will, health care directive and power of attorney, should be in place and up-to-date. Review them to confirm that they’re consistent with your wishes and the current laws.
Second Step to Clean Up Your Estate Plan: Review your named beneficiaries and fiduciaries. Confirm that the names of designated beneficiaries and fiduciaries are accurate. Most assets will pass under your will or through trusts, other accounts such as retirement, or life insurance may pass directly to a named (or contingent) beneficiary. If your planning circumstances have changed since creating these designations, update them.
Third Step to Clean Up Your Estate Plan: Review your life and property insurance coverage. Be sure that these policies offer adequate coverage and meet their intended purpose. As your wealth increases, the planning purposes behind a term policy for risk mitigation purposes or a whole life policy to ensure ample liquidity upon death may become unnecessary. However, if your assets’ value has grown, you may need to re-examine if the current property coverage is sufficient to minimize your increased potential liability.
Fourth Step to Clean Up Your Estate Plan: Ensure that your beneficiaries have enough liquidity. The estate administration process can be slow and tiresome. It’s possible that a person may not have immediate access to liquidity after a spouse’s death, depending on how assets are titled. A temporary (but major) burden can be avoided, by confirming at least some liquidity will be titled in or directly available to your spouse after you have passed.
Fifth Step to Clean Up Your Estate Plan: Locate and compile important information and account identification. A difficult step in estate administration is locating a decedent’s assets. Make this process easier for loved ones, by creating a list of your accounts, property of significant value, liabilities and contacts at each financial institution. Make the list easily accessible to your family or executor, and update it whenever opening or closing an account.
Sixth Step to Clean Up Your Estate Plan: Review digital assets and online accounts. These assets are frequently overlooked as to access and ownership after death. Instead of divulging passwords or allowing account access, you can add a “digital assets clause” to your planning documents. This lets named parties access specific items within the bounds of accepted legal standards.
Seventh Step to Clean Up Your Estate Plan: Draft a letter of wishes. This document allows you to fully express your intentions and hopes, as well as any explanations or instructions you want to impart to your loved ones.
Eighth Step to Clean Up Your Estate Plan: Plan to review. Repeat the review process regularly and calendar a reminder to give yourself an annual financial and planning checkup.
BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.
If you liked this article, “Will My Social Security Benefits Be Taxed?” read these additional articles: What OTC Drug Makes High Blood Pressure Worse? and Should I Start Estate Planning Now? and What’s the Best Way to Mess Up Estate Plan? and Will My Social Security Benefits Be Taxed?
Reference: Chicago Business Journal (Dec. 2, 2021) “8 steps to tidy up your estate plan now”
