Is Your Estate Plan Missing This Critical Element?

real estate plan on business folder showing buy a house concept

In the past, we have written about the importance of updating your estate plan as life changes. But an effective estate plan requires more than this. It requires a scheduled annual review with your lawyer.

The Annual Review: What’s Involved

When you meet with your lawyer for your estate plan’s annual checkup, you will likely discuss the following:

  • Marital status: Under Minnesota law, your spouse is your direct beneficiary, unless you have a current and valid will in place that says otherwise. A marriage, divorce or separation can therefore have a major impact on your estate plan. Review it carefully with your lawyer to make sure it properly reflects your wishes.
  • Dependents/children: Did you have a child last year, or did one of your children turn 18? Any dependent status requires a thorough review of your estate plan to ensure your will and any trusts are up to date.
  • Financial status: Have you had a significant change in income? Perhaps you received a large raise or great promotion? Or did your job status decline due to health or other reasons? Maybe you bought a bigger house, acquired more property or received an inheritance? The point is that any financial change can greatly affect your assets, your tax bracket and more. Reallocating those assets is key to ensuring you save yourself and/or your loved ones from paying excessive taxes.
  • Investment goals: Did you make changes to your investment goals and plans over the past year? Is your estate plan in line with, and supportive of, those goals? Your lawyer can walk you through how your investment and estate plan work together to support your retirement and your legacy.
  • Beneficiaries: Do you have a charity you would like to have benefit from your estate? Are there current listed beneficiaries you would like to remove? Are your beneficiary lists current with regard to your trusts, life insurance policies, bank accounts and other accounts?
  • Nominations: You will want to review your guardian, executor, powers of attorney designations and other nominated individuals to reassure yourself that you are still content with your choices.
  • Trust funding: Have you created new trusts or changed any of the accounts you had funding previous trusts? Your lawyer can review these to ensure your trusts will actually provide some benefit when and if they take effect.
  • Healthcare preferences: Have your thoughts on healthcare changed over the past year? Do your advanced healthcare directives reflect those changes? Are you planning to undergo surgery in the coming year or two? You will want to make sure your healthcare wishes and your healthcare power of attorney are set in place in advance of any hospitalization.
  • Final wishes: Does your existing will accurately convey how you want to distribute your estate upon your passing? Does it express your wishes with regard to your pets?

Don’t Miss This Critical Element of Estate Planning

The annual review is the one item that most individuals fail to follow through on when it comes to estate planning. If this is something you have fallen behind on in the past, there is no time like now to get back on track. Pick up the phone or send an email to your estate planning attorney to discuss your will, trust, powers of attorney and more.

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