Jun 08, 2017

4 Annual Estate Planning Must Dos

By Byron Ellis

I find that the most overlooked financial work tends to be getting your estate planning documents created. It may have taken you years to finally break down and get something on paper. Good for you for getting it done. But don't relax for long. You need to take a look at your plan at least annually. Here are your four annual must dos:


1. Take a look at all of your beneficiary designations.

It is really easy to make a mistake and overlook changes that need to be made or simply choose the wrong option from the start. Jay Knighton, a Board Certified Estate attorney with Knighton & Stone in The Woodlands, TX, suggests that all of your beneficiaries should be coordinated with your will and trust documents. "You may have the most up to date will and trust created but if your beneficiary designation is worded wrong you might find that your assets completely bypass the documents that you have created" Knighton says. For example, you might wish for your IRA to be placed inside of a trust for the benefit of your children. If you selected a very normal beneficiary option that would direct the IRA to your spouse if living, and then to your children if your spouse predeceases you, your IRA could go directly to your kids instead of to the trust.

Most attorneys will give you specific instructions on how to word your beneficiaries for your life insurance and retirement plans. Follow them carefully and review them annually to help insure that all of
your new assets fall in line.

2. Communicate with the important people.

If you have a will you most likely designated an Executor, maybe a Trustee, and possibly agents in Powers of Attorney. Don't let your designation be a surprise to them. Inform them of your decision and let them know annually where you keep your important documents. Knighton suggests giving the contact information of your attorney and financial adviser along with the
location of your estate planning documents to all involved.

3. Take some time to update your net worth statement.

This is simply a list of your assets and your liabilities. If you subtract the liabilities from your assets you will have calculated your net worth. "Keeping this up to date allows the Executor or Agent in your Powers of Attorney to know what you own should you ever pass away or become incapacitated" says Knighton.

4. Take a look at the date you last updated your documents.

If the work was done five or more years ago it may be time to get everything reviewed. Knighton suggests double checking the Executor, Trustee, Guardians and agents listed to ensure all of your choices are still the best people for the jobs. If your children and all those mentioned in the will are older it may be time to replace some of your choices.

So set up an hour to do a little reading. You may find that things are still in order. If you find that some work is needed, don't put it off like you put off creating it in the first place.

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