Give Your Estate Plan a 2017 New Year Checkup

Welcome to 2017! If you’re like me, you’ve spent the first few days of the New Year trying to get organized and set some goals for the year to come.  Whether it’s a new workout regimen, quitting smoking, spending more time with family, or something else, the start of a new year presents a natural opportunity to make some small changes to improve ourselves and our lives. One item that you may have been putting off for a while may be putting an estate plan in place to protect your family. And, if you haven’t done so, I’m happy to help you make 2017 the year you finally cross that ever-looming item off your to-do list.

If you do have a plan in place, it’s important to make sure it continually reflects your goals and objectives.  If you put a plan in place this past year or 10 years ago, with the year winding down, it’s a good idea to ensure that it still reflects your wishes. As we all know, those can change from time to time, especially when significant life events have recently occurred. The birth of a child, marriage, moving to a new home and starting a new career are some significant events that may lead to new considerations for your plan. So too are more unfortunate things like a divorce or death in the family.

Remember that, as your life changes, so too should your estate plan.

So, while we are all still trapped inside avoiding the artic freeze outside, take some time to take stock of your current plan and think about making any changes that may be overdue.

Here are 7 areas where a quick review will help you start 2017 on the right foot:

1.Review your current will (and trusts).

A number of changes to tax and inheritance laws have occurred over the past few years meaning that many plans may not reflect the most current laws. A review can help ensure that your will and trust(s) are up to date. At minimum, it’s a good idea to review beneficiary designations, trustee designations, and personal representative designations. If those individuals are no longer living or your relationship with them has changed, a modification may be necessary.  

2.Double check healthcare-related planning documents.

This is a big one for everyone regardless of age or financial health. Current events illustrate that good health isn’t guaranteed. Make sure to take some time to go over agent designations and wishes relating to treatment. It’s important to discuss those wishes with your loved ones as well so that there is no confusion or disagreement over what needs to be done in the event you are unable to act for yourself. For Illinois residents, there are also some changes to the Illinois power of attorney statute, effective January 1, which could raise implications for you.

Documents to comb through are your a) durable power of attorney for healthcare, b) HIPAA authorization(s) and c) living will. If your current documents don’t reflect your wishes or you have never had these drafted, an estate planning attorney can have them drawn up in relatively short order. Finally, while if you’re up for it, take some time to write down and discuss funeral arrangements or anatomical gifts you may want to make should the unthinkable happen. While the conversation may not be the most pleasant, it sure beats straining family relationships when those people have to try and guess your wishes.

3.Make sure policies match.

Items like insurance policies and retirement plans fall outside of typical estate planning documents, like wills and trusts. In order for the proceeds of these items to pass to a chosen individual, he or she must be named as the beneficiary of the policy. Similarly, if you have a revocable trust, it’s important to review your policies to ensure that beneficiary designations properly name the trustee of the trust as the beneficiary, if this is what you and your advisors have decided upon. If individuals previously named as beneficiaries have passed away, or are otherwise no longer in your life (i.e. ex-spouses) make sure that these items are updated. If you’ve recently created a revocable trust, make sure that it’s actually functional by naming it as the beneficiary of policies.  

4.Make sure your trust funding is current.

If you have a trust, you know that it’s only as good as the assets it actually owns or controls. When it was drafted, you and your attorney probably walked through all of your assets, determined which ones should be transferred to the trust, and acted appropriately to make the transfers. But, chances are that some of your assets may have changed since then. So, it’s important to take stock of what your trust currently owns and what may need to be transferred to it. For example, if you have moved or purchased a home, chances are it is not titled in the name of the trust. By filing a new deed or Transfer On Death Instrument, you can ensure that your home ownership syncs up with your estate plan.

5.Double-check joint ownership.

Designating heirs on accounts is a common estate planning mechanism. Often times, naming an individual like a child a joint owner on items like bank accounts is not advisable. However, converting accounts into Payable Upon Death (POD) accounts can accomplish the same objectives without some of the drawbacks that joint accounts carry. This can be a very functional way to ensure that certain liquid assets pass to chosen individuals you’re your death and it can be done with minimal paperwork or change in structure of your existing accounts. Talk with your advisor about exploring the idea as you review the rest of your plan.

6.Don’t keep safe-deposit box inventory a secret.

While safe deposit boxes offer great protection for important documents like wills, trust instruments, life insurance policies, and funeral instructions, they can create quite a headache for your loved ones after you’re gone if you don’t take steps to ensure they can be found and accessed. Make an inventory of the contents of all safe deposit boxes you have and share the list and location of each box with a trusted individual, perhaps the individual you have named in your will as your personal representative. This way if something happens to you, that individual will be able to quickly track those items down and act appropriately.

7.Take care of business.

If you’re a business owner, make sure to review and revise existing buy-sell agreements, or prepare such agreements if none currently exist. Review bylaws or operating agreements and ensure that they are current and reflect the current state of the business. This will ensure that operations won’t be interrupted should something happen to you.

Along with these seven items, if you have gone through significant life changes in 2016, like divorce, losing a loved one, marriage or having a child now is a good time to sit down with your estate planning attorney and make sure everything is up to date and everyone is taken care of. Spending a few hours to review everything now will provide you piece of mind as you tackle life in 2017.

Michael F. Brennan is an attorney at the Virtual Attorney™ a virtual law office helping clients in Illinois, Wisconsin, and Minnesota with estate planning and small business legal needs. He can be reached at michael.brennan@mfblegal.com with questions or comments, or check out his website at www.thevirtualattorney.com.

The information contained herein is intended for informational purposes only and is not legal advice, nor is it intended to create an attorney-client relationship. For specific legal advice regarding a specific legal issue please contact me or another attorney for assistance.

By Michael Brennan



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