Spring symbolizes renewal and growth, a time we’re inspired to clear out the old to make way for the new. It's often a time that prompts us to revisit and declutter our living spaces, but what about the less tangible aspects of our lives, such as our estate plans? It’s equally important to dust off and refresh your estate plan. This spring, take the opportunity to clean up your estate plan, ensuring it continues to reflect your wishes and circumstances. Here’s how to best approach this critical task:
Revisit Your Trust Documents
Trusts are the cornerstone of estate plans, offering control over how your hard-earned assets are distributed and avoiding the expensive time-consuming probate process. However, the effectiveness of a trust is contingent upon its relevance to your current situation. Review your trust documents to confirm that the named Trustees and beneficiaries still align with your intentions. Changes in relationships or family dynamics, such as marriages, divorces, deaths or the addition of new family members, may necessitate updates to these documents.
Ensure Proper Funding of Your Estate Plan
An often overlooked but crucial aspect of maintaining an effective estate plan is ensuring it is properly funded. This means that the assets you intend to be owned by your trust are correctly titled to or assigned to the trust. For trusts, this involves transferring ownership of assets such as real estate, business interests, bank accounts, and investment accounts into the trust's name. Without proper funding, even a meticulously drafted estate plan can fall short of its intended purpose, potentially leading to a probate you aimed to avoid. This spring, take the time to review your assets and confirm they are properly titled, especially if you have refinanced, bought new property, or opened new bank or investment accounts since creating your trust. If you find discrepancies or have acquired new assets, consult with an estate planning attorney to make the necessary adjustments.
Confirm the Viability of Your Powers of Attorney and Healthcare Agents
Life’s only constant is change, and the individuals you once appointed as your power of attorney (POA) or healthcare agents may no longer be the best choices. These roles are critical. They grant someone you trust the authority to make decisions on your behalf if you're unable to do so. It's essential to confirm that these individuals are still willing, able, and ideally suited to these responsibilities. Moreover, ensuring they are still alive and part of your life is a practical necessity that cannot be overlooked. Perhaps when you created your estate plan your children were minors but are now adults and better suited to serve as your agents.
Assess Changes in Your Estate’s Size and Tax Implications
As time passes, the value of your estate changes due to various factors such as investments, property values, and inheritance. With the current estate tax exemption set to sunset at the end of 2025, absent any new legislative action by Congress, an increase in your estate's size can have significant tax implications, potentially affecting how much of your estate is passed on to your heirs. This spring, assess any growth in your estate and consult with a qualified estate planning attorney to understand the current estate tax laws and how they apply to your estate. Proactive planning can minimize tax liabilities and maximize the assets distributed to your beneficiaries.
Communicate and Document Changes
Transparency and communication are vital in estate planning. Once you’ve reviewed and made the necessary updates to your estate plan, communicate these changes to the relevant parties. Ensure your Trustees, power of attorney agents and health care agents are aware of their roles and have access to the necessary documents. Additionally, keep your estate planning documents in a secure yet accessible location and let your loved ones know where to find them and who your estate attorney is.
Spring cleaning for your estate plan is a proactive step toward ensuring your legacy is preserved and your wishes are honored. It provides an opportunity to reflect on changes in your life and how they impact your estate planning goals. By taking the time to review and update your estate plan this spring, you can enjoy peace of mind, knowing your affairs are in order and your loved ones are protected.
If you, a friend, or family member need help updating or establishing an estate plan, please reach out to our Intake Department at 760-448-2220 or at https://www.geigerlawoffice.com/contact.cfm. We have offices in San Diego County (Carlsbad) and Orange County (Laguna Niguel), but we assist can families throughout California as well.
