When work slows down, the kids are away at camp, and those long hazy lazy days of summer set in, it’s the perfect time to revisit your estate plan. In doing so, it is crucial to address the following three questions:
- Have You Prepared Advanced Directives?
Advanced Directives are legal documents you execute during your lifetime, while you have capacity, which allow you to designate whom you wish to make medical decisions for you and/or handle your financial affairs should tragedy or illness strike, rendering you unable to do so yourself. Your estate plan should include a Healthcare Proxy and HIPAA form (for medical decision making and access to medical information), a Living Will (guidance for your Healthcare Proxy when it comes to end-of-life decision-making), and a Durable General Power of Attorney with broad gifting powers (for handling your financial and personal affairs).
Beyond confirming that the above-referenced documents exist, you should also ensure that alternate agents are designated in case your first choice does not survive you or is unable to act, that the agents you have appointed are still the individuals you want to have these powers, and that those agents have copies or know how to access these documents when necessary.
- Do Your Retirement Accounts and Life Insurance Policies Have Named Beneficiaries?
Confirm that each of your retirement accounts (e.g., IRAs, 401Ks, 403Bs) and life insurance policies have named beneficiaries, both primary and alternate. Upon your passing, the account will pass directly to the designated beneficiary by operation of law, without the need for a probate proceeding. However, if an alternate beneficiary is not named, then the account will be payable to your estate, thus requiring probate. Additionally, if the beneficiary is deceased and you want their share to go to their children, you should state their name followed by the words “per stirpes.”
- Does Your Trust and/or Last Will and Testament Require Updating?
As with your Advanced Directives, make certain that the individuals you previously appointed as Executor of your Last Will and Testament, as Guardian of your minor children, and/or as Trustee or Successor Trustee of your Trust are still people you trust to serve in these important roles. Furthermore, consider whether, between now and the time your documents were drafted, anything has happened in your life or in the lives of your named Executors, Trustees, and/or beneficiaries that necessitates a change to the appointments made and/or modification of the dispositive provisions of your documents—e.g., estrangement, marriages, divorces, births, deaths, financial windfalls, bankruptcy, illnesses, etc.
In life, the only constant is change, and so should your estate plan. Have a glass of lemonade, enjoy the sounds of the cicadas, and review your plan before summer’s end.
