Midyear Reality Check: 6 Tips for Updating Your Estate Plan
As we near the end of June and sneak up on the Fourth of July, many of us are dreaming of packing the kids off to camp and enjoying a well-deserved vacation of our own. But the halfway mark is also the time to be taking stock. What have we accomplished and what can we do in the next six months to meet our 2017 goals?
Time for creating or updating Living Trusts
- At DP Legal Solutions, we’re bullish on Living Trusts! Our goals for our clients always include either creating or updating their Living Trusts. It’s easy to procrastinate, but the rewards are great. Creating and funding a Living Trust is one of the most thoughtful gifts you give your family.
- Unfortunately, many people believe that once they create and fund their Living Trusts, the process is finished. But we caution our clients to review and update their Trusts every few years--this is especially important for those who create their Trusts when their children are still young and they’re building their careers.
- Living Trusts should be updated with important life events—births, deaths, marriage or divorce, significant investments, purchases of real property, a new job where you’re making more money—these are all signals that it’s time for an update.
We’ve prepared a list of six things you can be doing to stay on top of your overall estate planning.
1. Review your existing Will and Trust.
Over the course of a year your professional life can change dramatically.
- New tax laws can affect the way in which you allocate your assets and may necessitate changes in the way you distribute your estate.
- Do you need to change or add beneficiaries? If there have been births, deaths or new additions to your family, you well may need to make changes to your beneficiaries.
- Are your named Agents and Successor Trustees are still appropriate, as they will be faced with significant responsibility. Health issues and job commitments take their toll, so this is a good time to ensure that those you identified, including those in backup roles, are still able to assume this responsibility.
2. Review your beneficiary designations
Assets that pass by beneficiary designation, such as life insurance and retirement accounts, including 401k’s, fall outside a Will or Trust and should be reviewed along with your Trust. Relationships change; make sure that the people you name as beneficiaries are still appropriate.
3. Financial Power of Attorney
Review the person whom you’ve identified as your Power of Attorney. This is the person who may be asked to pay your bills, prepare your taxes and make financial decisions for you if you become incapacitated, so it must be someone who has a facility with numbers and the time to do this.
4. Review existing insurance coverage (life, homeowners, umbrella, disability, LTC, etc.)
As your assets and liabilities change, so does your liability exposure. It is important to review your current policies and circumstances to determine whether you need an increase in coverage or if it’s time to underwrite new policies. Something to think about: A large percentage of Americans will require nursing care at some time in their lives, and it’s not covered by Medicare. Long-term care insurance (LTCI) is much less expensive if purchased when you’re younger and in excellent health. Life insurance companies are also bundling LTCI with life insurance policies.
5. Review your investments – and your investment advisors
Be a smart—it’s your money; ask yourself some questions:
- Are you satisfied with the way your accounts are performing?
- How much did you pay in fees last year?
- Is your investment advisor held to a fiduciary standard, which keeps your best interests above all else, or to the less-stringent “suitability” standard?
6. Review how your assets are titled
Depending on your circumstances, it may be advisable to retitle assets from one spouse to the other, or from a joint tenancy into a tenancy in common. The way in which title to a Deed is held can make a big difference if something should happen to you.
Do you have questions about creating or updating your Living Trust? We make it easy for our clients by creating the legal documents. Schedule an appointment with DP Legal Solutions today: 510.346.5686.