Time for a Check-Up

When you visited your doctor last time, did the doctor tell you he or she wanted to see you in six-months or a year for a “check-up”? Probably, and you probably understood that a check-up of your health was important. Why is it then that many people seem to not understand the importance of an estate planning check-up?

Have you changed over the past 20, 10 or even 5 years? What about your loved ones? Have their circumstances changed over time? Yes, you have a Will so can feel comfortable that you have at least expressed your intentions in writing. But, when was the last time you actually looked at your Will, or Power of Attorney, or Living Will, or Trust? Not surprisingly, most people who actually review their older estate planning documents are shocked by what they find—beneficiaries who have died, executors who are no longer able to serve in such a position, no mention of younger generations of loved ones, continued mention of long-divorced or even deceased spouses, etc. And, keep in mind that it isn’t only the will or trust you need to keep up to date. It is, in fact, every beneficiary designation you have made on retirement plans, investment accounts, bank accounts, insurance policies, etc. For a married couple, that means times two.

Does updating your estate planning documents really matter? If you want to leave peace and harmony in your family when you go, the answer is yes. If you want to precipitate a war among loved ones and family members, there is no better way to do it than to have fights over the meaning of language you have left behind. “Everything to my spouse, if she survives and, if not, in equal shares to my children.” Sound good? It is, unless you take into account that the creator of this language was divorced with two children he has not seen for twenty years; remarried to a woman who died but had children and has been rearing his step-children (whom he never adopted) as his own for twenty years. Under the language, the step-children are cut out of the will entirely.

Or, suppose you went to the trouble of protecting your loved ones by creating a Revocable Living Trust. The concept of the Trust is to avoid the probate process. To do that, you re-titled your property into the name of your Trust so that you would not die holding property in your sole name. Holding property in your sole name means your loved ones have to go through the probate process to take possession of the property. To create a Trust and not check it periodically just defeats the purpose of the Trust. Suppose, for example, that you inherited a house after you created your Trust and you did not update the Trust to include it. When you die, that house will have to go through the probate process to get to your loved ones – the very thing you created the trust to avoid. Updating a Trust is critically important and you should be meeting with your estate planning attorney to do that every couple of years.

Let’s not forget the critical Power of Attorney document or your Living Will. The person you might have appointed in your Power of Attorney years ago may no longer be capable or even willing to serve in that capacity. Most attorneys advise clients to name at least two fall-back persons who can act as Power of Attorney in the event the named person doesn’t survive. If you have not yet done that, make sure you do. And, if you have not reviewed your “no life-sustaining procedures” requests made under your Living Will, make sure you still agree with what you said. Keep in mind—with all estate planning documents, the latest dated document counts.

What about those beneficiaries you designated to receive your retirement amount or insurance proceeds when you die? When was the last time you checked those? You need to know that a Will or a Trust will NOT override the beneficiaries you have named to receive insurance or retirement proceeds. So, make sure those beneficiaries match what you want to do in your Will or Trust. Have you left your retirement savings to an ex-spouse? Or your life insurance proceeds to your deceased parents? Updating beneficiary designations is one of the most important tasks you can complete to ensure you have protected yourself and your loved ones.

Updating your estate documents is not a difficult task. Many firms, including mine, offer document review at no charge. Even if you have changes you want to make, amending your documents is not a costly proposition. Give yourself the gift of peace of mind by regularly reviewing what you have and keeping all your estate planning documents up to date.

About the Author: Lyn Striegel is an attorney in private practice in Chesapeake Beach and Annapolis. Lyn has over 30 years experience in the fields of estate and financial planning and is the author of “Live Secure: Estate and Financial Planning for Women and the Men Who Love Them (2011 ed.).” Nothing in this article constitutes specific legal or financial advice and readers are advised to consult their own counsel.

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