LEGAL ADVICE—Good Advice: An Annual Review of Your Estate Plan

By on March 2, 2015
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By Elizabeth Wynn

As spring quickly approaches and you are planning your annual cleaning, remind yourself to also “clean up” your estate plan. How long has it been since you’ve really looked at your documents? Have you recently reviewed your plan with the lawyer who prepared it?

The first question you need to ask yourself is “what has changed”? Marriage or divorce? Births or deaths? Financial events? Any of these changes, or others, can affect your current estate plan, so your documents may need to be revised.

What documents or provisions need to be reviewed? You need to examine whom you’ve designated as your executor, if you have a will, or your trustee, if you have a Revocable Living Trust. First and foremost, your trustee should be someone you know to be responsible and trustworthy.

You might want to designate a corporate trustee, that is, a bank or a trust company, if you don’t have an individual who is capable of serving. That corporate trustee will provide expertise and resources that an individual trustee might not be able to provide, but they will charge a fee for their services.

If you do name individual trustees, be sure you let them know in advance that they’ve been named. Discuss with them the responsibilities involved, and if you’ve made any unusual provisions in your plan such as disinheriting a child, or making unequal distributions among your children. Make sure your trustee is prepared for that.

Next, you should review who your beneficiaries are, and what they are to receive in your current plan. Are all of the original named beneficiaries still alive? These are just some of the instances we see that require frequent revision.

Along those same lines, have you made provisions to give away gifts of specific property, like family heirlooms, furnishings, or jewelry? In Mississippi, property items such as those mentioned above can be separated from your will or trust. A separate document can be prepared in accordance with Mississippi law and the will or trust will not affect their disposal. Thus, you might need to have that document added to your current plan.

Also, you should review your financial powers of attorney. The authority granted can be extremely broad. Be sure you are comfortable with what you are granting.

Together, with your financial powers of attorney, you should also have an Advance Health-Care Directive. This document includes naming a person to make health care decisions for you in the event you can’t do it for yourself, and it also specifies your wishes for medical care. Again, there has to be a great degree of trust between you and the agent you name in this document, so be sure that you’ve appointed someone that is mature enough to handle the responsibility. If you have family members that live out of state or across the country, then you probably want to appoint someone who lives near you who can be accessible in the event of an emergency.

Lastly, in the way of a review, check the beneficiary designations you have made on your life insurance and retirement plans, for the same reasons you need to review beneficiary designations in your will or trust. The use of beneficiary designations on insurance or retirement funds will cause that asset to avoid probate, but there can be problems when beneficiaries have creditors. Maybe the better way would be to make your trust the beneficiary because it can provide protection for your beneficiaries from creditors and other threats to their inheritance.