Current Trends - Your Annual Estate Plan Checkup - Episode 230

Hey there, Legal Tea Listeners – This is your host, Jenny Rozelle. Welcome back for another episode, which is a “current trends” topic where we talk about things going on currently that are relevant and pertinent to my estate and elder law world, and/or maybe things I’ve seen on the news or stumbled across on social media. Well today’s episode is the first one following the new year – so happy New Year, and welcome back! You know, January is the time when everyone's thinking about fresh starts—new gym memberships, organizing closets, maybe finally tackling all those junk drawers. etc. But there's one area that often gets overlooked in all this new year energy: your estate plan. Or maybe it does not, but then it hangs out on the to do list. And, I know, I know. Estate planning is not exactly the most exciting topic to add to the list. But here's the thing—if you set up your estate plan years ago and haven't looked at it since, it might not reflect your life as it is today. And if you do not have an estate plan at all? Well, we need to talk!

So today, we are going to go through kind of a complete estate planning annual checkup—think of it as your yearly maintenance checklist. I'm going to walk you through what documents you may want to consider, what assets to review, and how to just make sure everything is up to date. Grab a cup of coffee, maybe a notepad, and let's dive in – and let's start with the foundation—your core estate documents. These are the legal papers that make up your estate plan, and they're absolutely essential. First up: Your Will. This is a document that says who gets what when you're gone. Pull it out and read through it. And I'm serious—actually read it. When was it last updated? Are the people you named as beneficiaries still the people you'd choose today? What about your executor—the person responsible for carrying out your wishes? Are they still alive, still capable, and still willing to take on that role? As I’ve said before a lot on this podcast, life changes fast. Maybe you've had another child, or gone through a divorce, or your sister who you named as executor moved across the country. These things matter.

Next: A Trust, if you have one, review it; if not, let’s talk about that too. Not everyone has a trust, but if you do, this is a big one to review. Check that all the right assets are actually titled in the name of the trust—that is called "funding" your trust, and it is where a lot of people drop the ball. Your house, your investment accounts, your business interests—if these were supposed to go into the trust and they did not, your trust may not do its job. This is probably the number one mistake I see with trusts—people go through all the effort and expense of creating one, and then they never actually fund it. So pull out those deeds and account statements and verify the titling. Also review your successor trustees. Are they still the right people for the job? Now, if you do not have a trust, this is a good time to consider whether you want or need one. And I'm not going to dive deep into that decision today because honestly, we have plenty of episodes on this podcast about whether a trust makes sense for your situation. But just know that this annual “checklist” review is a perfect time to revisit that question, especially if your circumstances have changed.

Third: Healthcare Documents, Advance Directives, and Living Will. This is where you spell out your wishes for medical care if you are unable to speak for yourself. Who is your healthcare decision-maker? Would you still choose that person today? And your actual medical wishes—do they still reflect your values? This is deeply personal stuff, and it deserves a fresh look each year.

Fourth: Financial Power of Attorney. This document lets someone manage your financial affairs, usually if you become incapacitated. Is the person you designated still trustworthy? Still capable? Still in your life? Make sure this document is up to date and that your agent knows where to find it.

Now that the foundational documents are covered. Now let's talk about your assets—because your estate plan is only as good as your understanding of what you actually own. Start by creating or updating a comprehensive asset inventory. I want you to list everything: real estate, bank accounts, investment accounts, retirement accounts, life insurance policies, business interests, valuable personal property, vehicles, everything. And for each asset, note how it is titled and who are beneficiaries listed (if there are beneficiary designations listed). This matters enormously for how that asset will be transferred when you die.

I want to talk about a few types of assets more specifically…

First up is real estate specifically. How is your home titled? If you're married, is it joint tenancy with rights of survivorship? Tenants in common? Community property? If you have a trust, is the property deeded to the trust? If you've bought or sold property in the past year, you need to make sure your estate plan reflects that change. Property is so easy to mess up (and people do all the time!) and usually, it is messed up because people make assumptions about the titling and how it works if someone dies.

Next up: Investment and retirement accounts: Pull up those year-end statements you just received. Confirm the beneficiaries—both primary and contingent. If you've changed jobs, you might have an old 401k sitting somewhere that needs to be addressed. Don't let accounts get lost in the shuffle. That happens way more often than people think – so this annual “checklist” time is a good time to make sure none slip through the cracks.

Let’s talk … Life insurance: When was the last time you reviewed your coverage? Is it still enough to meet your family's needs? Have you had another child? Bought a bigger house with a bigger mortgage? Your insurance needs change as your life changes. And again—check those beneficiaries.

Speaking of beneficiaries – those, too, are easy (TOO easy) to mess up. Here's something that trips people up constantly—beneficiary designations on retirement accounts, life insurance policies, investments, etc. actually override your estate documents (unless you have listed your estate or trust as the beneficiary). So, does not matter what your will says if your 401k still lists your ex-spouse as the beneficiary. So pull out those statements and double-check every single beneficiary designation when you are doing that inventory of assets.

What about … Business interests: If you own a business or a stake in one, does your estate plan address what happens to it? Is there a buy-sell agreement? Does your business partner know what you want to happen? This is especially important for family businesses, family farms, etc.

Now let's talk about the people in your plan because people change, circumstances change, and relationships change. Starting with…

Guardians for minor children: If you have kids under 18, who would raise them if something happened to you? If you have documents, are the people you listed as Guardians still the right choice? Have you actually had a conversation with those people to make sure they are willing and able? You should also name backup guardians in case your first choice cannot serve, or something happens to them. They are not immortal either.

Executors and trustees: These are the people who will manage your estate and carry out your wishes. Are they still up for the task? Are they good with finances and paperwork? Are they organized? Sometimes the person you chose ten years ago is not the right person today, and that's okay.

Healthcare decision-makers and financial powers of attorney: Same questions. Are these people still in your life? Still capable? Still trustworthy? And do they know they've been named? Don't let this be a surprise.

Beneficiaries: Beyond the beneficiary designations (as in, listed on assets) we talked about earlier, think about whether your actual distribution plan still makes sense – as in your documents like a Will and/or Trust. Maybe one of your children now has special needs that require different planning. Maybe one is financially irresponsible and would benefit from a trust rather than an outright inheritance. Maybe you've become estranged from someone you'd originally planned to include. Maybe you once had restrictions around how your kids inherited because they were young at the time – and now they are adults. Your estate plan should reflect your current relationships and wishes.

Something else I want to talk about is what has changed in your life over the past year or last few years, because honestly ANY major life event should trigger an estate plan review. Things like: marriages, divorces, births, adoptions, deaths, changes in assets, relocate/move to another state, etc.

Not something a bit more practical: where are you keeping all of these important documents? You need to have your documents in a safe place—something like a fireproof safe at home. But here's the key: other people need to be able to access them when the time comes. (That is exactly why I am not a big fan of putting documents in a safe deposit box at a bank…) Something else to consider doing is creating a document that tells your loved ones where everything is. Where's your estate documents? Where are the account statements? Where's the password manager? Who's your attorney? Your financial advisor? Your CPA? Put all of this information in one place and make sure trusted people know where to find it. Also, you may want to consider creating a letter of instruction—this isn't a legal document, but it's incredibly helpful. It can include things that would help your family during a difficult time.

So, that’s why I’ve got for you today, folks! That is your annual estate planning checkup. It is not glamorous, and it is not something most people are excited to spend time on or add to the resolution list—but it IS one of the most meaningful ways to protect the people you care about. A little attention each year keeps your documents aligned with your life, prevents unnecessary headaches later, and helps you stay in control of your own wishes. If today’s episode reminded you of even one thing you need to update, take a few minutes this week to get that process started – even if it is just calendaring when to do it. Small steps now can make an enormous difference down the road.

Alrighty, let’s wrap this episode up, shall we? Next week, we’re back to the “celebrity estate planning” type of episode – so, for this episode, I’m going to do an episode on the estate of George Foreman – everyone knows him/that name, right? Boxer … but also those George Foreman grills! So yeah, next week will be on him, so tune in next week, Legal Tea Listeners. Talk to you then!