By Elizabeth A. Caruso, Esq.
This is a myth! An estate plan is not a “set it and forget it” document. Life changes and the law changes. An outdated plan can be just as problematic as having no plan at all.
It’s that time of year again – time to start making resolutions about how you are going to improve your life in the coming year. When it comes to financial well-being, one of the most important resolutions is to review your estate plan.
Here are a few reasons why you should make reviewing your estate plan your New Year’s resolution:
- Life changes require updates: Has your family situation changed? Perhaps a new grandchild has been born, a child has gotten married or divorced, or a loved one has passed away. Any of these events can affect who you want to inherit your assets and who you want to make decisions for you. Your documents should reflect your current wishes and family structure.
- Asset changes and beneficiary designations: Did you recently sell a house, open a new investment account, or receive an inheritance? It is crucial to ensure that the titles to your assets are held correctly (e.g., in the name of your trust, if you have one) and that the beneficiary designations on your life insurance policies, IRAs, 401(k)s, and other retirement accounts are up to date. Beneficiary designations override what is written in your will or trust!
- Legal changes: Laws are constantly evolving, especially those related to taxes, Medicaid planning, and probate. What was legally sound a few years ago might not be the most effective plan today. An estate planning attorney can ensure your documents comply with the most current state and federal laws.
- Incapacity and decision makers: If you become incapacitated, your health care proxy and power of attorney documents name the people you trust to make medical and financial decisions for you. Do you still trust those individuals? Are their contact details current? Reviewing these ensures your wishes regarding your care will be honored.
- Protecting your heirs: An estate plan is vital for ensuring your wishes will be honored, your assets are distributed as you intend, and your heirs are protected. Without a proper plan, your estate could be subject to costly and time-consuming probate court proceedings, and the Commonwealth might dictate how your assets are distributed.
Take a moment this month to pull out your estate plan documents. If you cannot remember the last time you reviewed them, or if you’ve experienced a major life event since signing them, it’s time to schedule a review with your estate planning attorney. This is a manageable resolution that provides peace of mind for you and your family.
About the Author: Elizabeth A. Caruso, Esq. is an attorney at Legacy Legal Planning, LLC, in Norwell. She has been practicing estate planning, probate, and elder law on the South Shore for more than a decade. If this article has sparked questions for you, please feel free to reach out via phone 781-971-5900 or email elizabeth@legacylegalplanning.com to schedule a time to discuss your unique situation.
