The start of the year offers a great opportunity to take stock and reflect on any major changes that have happened to your life in the past year. Perhaps you got married (or divorced), added a new child to your family, bought a house or decided to retire. The myriad happenings of everyday life may mean that it’s time to review and revise your estate plan accordingly.
If you haven’t done so already, now is the time to consider the following:
- Who have you assigned as the beneficiaries on each of your accounts? As a rule it’s a good idea to check this at least annually with all account custodians (IRA, 401(k), pension, deferred compensation, life insurance, annuity, etc.). You may think, “But I’ve done this already and nothing has changed.” I still recommend checking anyway, as companies and their human resource departments can make mistakes, so make sure it’s not with your account. Furthermore, sometimes people only list primary beneficiaries and neglect to name contingent beneficiaries. If you find this is the case with your account, be sure to provide contingents. Otherwise in the absence on an appropriate beneficiary assignment, your heirs will be subjected to the custodian’s default policies.
- Do you have financial and healthcare/medical powers of attorney drawn up? These are legal documents which are required, in order to have someone else – a trusted person you have chosen – act in your place to make appropriate medical and financial decisions for you should you lose capacity. Illness and incapacity can be sudden and come at any age. Without durable powers of attorney your loved ones will be relegated to a court of law to obtain authority to handle your affairs.
- Check your accounts for proper titling. This is especially imperative if you have a trust, and extends to other assets, such your primary residence. Furthermore, if your trust is in one name but you have accounts that are titled differently it could cause problems for your heirs that the time of your death. For example, say your legal name is Robert John Wood. You go by Jim Wood. You have a few accounts under Jim Wood and others under R. John Wood. Plus your Trust is called the Robert John Wood Trust. This lack of consistency may cause a nightmare for your heirs upon your death. The primary document of identification when someone dies is their death certificate. The death certificate holds the legal name of the deceased and that is what must be submitted as proof of death to any company before they will pay the beneficiary. If the titles/names do not match the process will be grossly delayed.
- If there have been any changes to your family status, it’s a good idea to notify your estate planning attorney so that revisions can be made to your plan. Annual review of your estate plan is recommended, even if it is only a call to your estate planning attorney to double check on any changes in the law that might apply to you.