Checklist for Estate Plan’s Success

POSTED ON: October 27, 2021

Every so often, it’s smart to methodically go through your estate planning documents and see if any tweaks are needed. Here’s a checklist to guide you through that mission.

Checklist for Estate Plan’s Success

We know why estate planning for your assets, family and legacy falls through the cracks. It’s not the thing a new parent wants to think about while cuddling a newborn, or a grandparent wants to think about as they prepare for a family get-together. However, this is an important thing to take care of, advises a recent article from Kiplinger titled “2021 Estate Planning Checkup: Is Your Estate Plan Up to Date?

Every four years, or every time a trigger event occurs—birth, death, marriage, divorce, relocation—the estate plan needs to be reviewed. Reviewing an estate plan is a relatively straightforward matter and neglecting it could lead to undoing strategic tax plans and unnecessary costs.

#1 On the Checklist for an Estate Plan’s Success:  Moving to a new state? Estate laws are different from state to state, so what works in one state may not be considered valid in another.  This is particulary true for Louisiana, which has a codal civil law system.  You’ll also want to update your address, and make sure that family and advisors know where your last will can be found.

#2 On the Checklist for an Estate Plan’s Success:  Has Your Spouse Died?  When one spouse dies, it is often necessary not only to probate the esate of the deceased spouse, but also to make a new estate plan for the survivng spouse.  This is because the original plan may not have taken into consideration the unique rules pertaining to Medicaid and long term care planning.  If one spouse inherits everthing from the other, now the couple has put “all their eggs in one basket”; a perfect scenario for the couples wealth to be looted by long term care costs.  Don’t let this happen to you.

#3 On the Checklist for an Estate Plan’s Success:  Changes in the law. The last five years have seen an inordinate number of changes to laws that impact retirement accounts and taxes. One big example is the SECURE Act, which eliminated the Stretch IRA, requiring heirs to empty inherited IRA accounts in ten years, instead of over their lifetimes. A strategy that worked great a few years ago no longer works. However, there are other means of protecting your heirs and retirement accounts.

#4 On the Checklist for an Estate Plan’s Success:  Do you have a Power of Attorney? A POA gives a person you authorize the ability to manage your financial, business, personal and legal affairs, if you become incapacitated. If the POA is old, a bank or investment company may balk at allowing your representative to act on your behalf. If you have one, make sure it’s up to date and the person you named is still the person you want. If you need to make a change, it’s very important that you put it in writing and notify the proper parties.

#5 On the Checklist for an Estate Plan’s Success:  Health Care Power of Attorney needs to be updated as well. Marriage does not automatically authorize your spouse to speak with doctors, obtain medical records or make medical decisions on your behalf. If you have strong opinions about what procedures you do and do not want, the Health Care POA can document your wishes.

#6 On the Checklist for an Estate Plan’s Success:  Last Will and Testament is Essential. Your last will needs regular review throughout your lifetime. Has the person you named as an executor four years ago remained in your life, or moved to another state? A last will also names an executor for your property and a guardian for minor children. It also needs to have trust provisions to pay for your children’s upbringing and to protect their inheritance.

#7 On the Checklist for an Estate Plan’s Success:  Speaking of Trusts. If your estate plan includes trusts, review trustee and successor appointments to be sure they are still appropriate. You should also check on estate and inheritance taxes to ensure that the estate will be able to cover these costs. If you have an irrevocable trust, confirm that the trustee is still ready and able to carry out the duties, including administration, management and tax returns.

#8 On the Checklist for an Estate Plan’s Success:  Gifting in the Estate Plan. Laws concerning charitable giving also change, so be sure your gifting strategies are still appropriate for your estate. An estate plan review is also a good time to review the organizations you wish to support.

Reference: Kiplinger (July 28, 2021) “2021 Estate Planning Checkup: Is Your Estate Plan Up to Date?

Another article discussing updating your estate plan includes Why Would I Need a Will or a Trust? and How to Handle Finances after Spouse Dies.  Also, check out these other articles: What Do I Need in My Estate Plan? and What Is the Social Security Increase for 2022?

BOOK A CALL with Ted Vicknair today to find out more about how Louisiana’s unique laws can impact your estate planning.

Success Stories