Now that the 2022 year is underway, it’s time for a fresh start. A large facet of setting yourself up for success this year relies on being prepared. Although updating your estate plan was not likely one of your resolutions, it’s an imperative part of ensuring all your affairs are in order should the need arise.
Over the course of last year, you may have experienced many changes – whether that be a marriage, inheriting money, purchasing a home, or even a change in relationships, which could alter pivotal information like who you’ve named as your executor.
To ensure your wishes are carried out as planned, invest time in reviewing and updating your estate plan. Here are some tips on which areas of your estate plan you should revisit this year and why.
Consider Life & Relationship Changes
Your will is an important piece of ensuring certain facets of your estate are handled as desired should you pass or become medically incapacitated. From designating who will be responsible for your affairs to appointing a legal guardian for your children, there are people listed in your will who you are entrusting to carry out your wishes. That’s why it’s imperative to take the time to reflect on your relationship and review who you’ve selected to oversee different aspects of your estate plan.
For instance, the responsibility of an executor is a huge undertaking. The person you name will be accountable for everything from ensuring assets are distributed properly to your beneficiaries and liquidating your accounts, to potentially selling your home and paying nondischargeable debts, like taxes owed.
Another component of a well-crafted estate plan is creating documentation related to unanticipated or end-of-life issues. This includes appointing trusted individuals as powers of attorney, allowing critical decisions to be made on your behalf. In most cases, the person you opt to handle care and health-related matters will be different from whom you assign to manage your financial affairs. Even if you haven’t experienced a major life event in the past year, it’s always smart to revisit who you’ve chosen to take on these responsibilities and ensure they’re still the best fit for the job.
Revisit Your Account Beneficiaries
Assets like your retirement accounts and insurance policies can be passed outside of your will. For example, if you’ve named an ex-spouse as a beneficiary on one of these accounts, they’ll typically receive the money regardless of what’s stated in your will. That’s why it’s crucial to review your assets and ensure beneficiaries are up-to-date and listed as desired. Otherwise, your family will have to go through the headache of probate to try and recoup these assets upon your passing. The complexity of your estate, along with state laws, will impact how long probate lasts, but you don’t want your family spending months upon months attending court to get your assets properly distributed.
You’ve Moved to a New State
If you purchased a new home in the past year and moved to a new state, you’ll want to ensure your estate plan is updated accordingly to meet the requirements of your new location. Moving can potentially invalidate part (or even all) of your estate plan, so be sure to consult with your attorney on what changes need to be implemented.
There’s Been a Tax-Related Change
While taxes are one of life’s few certainties, tax-related changes can occur in any given year. When they do, they can potentially put your estate plan in limbo if not addressed. Whether changes occurred at the federal, state or local level, make sure to stay up-to-date on tax-related changes, so you can revise your estate plan accordingly.
The estate planning process can often feel complex and overwhelming – but it doesn’t have to be. Whether you’re creating one for the first time or you’re simply making some updates, having a trusted estate planning attorney on your side is the most effective way to ensure both your needs and crucial legal requirements are met. To keep your family protected and devise a strong estate planning strategy, contact our team of experts today.