Guide to Reviewing Your Estate Plan and Organizing Supporting Information
Whether you established your estate plan last month, a year ago or 15 years ago, you should review and update it regularly. Why? Every few years new tax laws, IRS rulings or case law can change the rules of the game and make your plan less tax efficient, or even obsolete. Meanwhile, you and your family will be aging and changing, and your goals may also change.
To ensure that your plan meets your estate planning goals, organize relevant personal and financial information. Giving the right information to the right persons now can make administration of your estate easier and less costly when the time comes for others to take over for you.
Reviewing Your Plan
To help you determine the importance of reviewing your estate plan and to highlight the areas you need to focus on, answer these questions:
Lifestyle changes since my documents were drafted:
- Have I married, divorced, separated or been widowed?
- Have I become a parent or grandparent?
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Have I received an inheritance or am I likely to soon?
- Have I moved to another state?
My estate plan today:
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does my plan take advantage of the unlimited marital deduction?
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Do I have a living trust? If I have a living trust, has title to all my assets been transferred to the trust?
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If my spouse and I together have more than $1.3 million, do we each have assets in our separate names of at least $675,000? If I have between $675,000 and $1.3 million, are assets split roughly equally between us? Do both our wills provide for establishing a credit shelter trust?
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Do I have a healthcare power of attorney or a living will that reflects my wishes concerning the use of life support?
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Do I have a durable power of attorney or other plan in place if I am incapacitated?
My business:
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Have I thought about the value of my business and whether my estate will qualify for any additional exclusion as a result of the new family-owned business exclusion?
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Have I considered the effect of adding any partners or shareholders to my business?
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Have I considered the effect on my estate plan of changing the structure of my business (for example, from partnership to S corporation?)
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Have I reviewed my plan for continued management of the company after my death?
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Will my business have enough liquidity to either buy out my interest or continue to support my family? Will sufficient funds be available to pay estate taxes on the value of the business?
Organizing Your Information
After you have successfully reviewed your estate plan and determined which areas need updating, don't let all of that hard work go to waste. The better prepared and organized your personal and financial information is, the easier it will be to execute your estate plan.
The first step is to list personal and financial information, such as estate plan documents, assets and liabilities, personal information, personal directives, and important people. Keep the information up-to-date and store it in a safe place. Here is a closer look at what information to include on each list.
Estate planning documents:
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The date and location of your most recent will and any codicils.
- The dates and locations of any premarital agreement, marital property agreement or unilateral statements you have signed
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The dates and locations of the documents and beneficiaries of any trusts you have created.
- The dates and locations of any custodial accounts you have created for your children.
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The dates and locations of any durable power of attorney for financial or healthcare purposes, declaration to physicians, living will or other healthcare directives you may have signed
Asset documentation:
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The names and addresses of all financial institutions where you have bank accounts, certificates of deposit, brokerage accounts, money market accounts and other types of financial accounts. Include account numbers and the names under which the accounts are held
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The names and addresses of all institutions administering any retirement benefits [individual retirement accounts (IRAs), pension plans, profit-sharing plans, nonqualified plans], the account numbers, and the beneficiaries and locations of the documents reflecting the plan accounts or benefits.
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The names and addresses of any insurance companies that have issued policies to you (life, accidental death, disability, accidental dismemberment, auto, home-owner's), along with the policy numbers, the face amounts or policy limits (if appropriate), the types of policies (for example, a term life insurance policy), the owners of the policies, the beneficiaries of the policies (if appropriate) and the locations of the policies.
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The locations of any real estate you own, including how title is held, when and how acquired (by gift, inheritance or purchase), and location of documents relating to the properties.
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Descriptions of any items or collections of personal property of significant value (antiques, jewelry, coins, stamps, art), their appraised values and their locations.
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Descriptions of stocks and other business interests you own, including stock certificates, buy-sell agreements, partnership agreements, operating agreements and real estate ownership agreements, and the locations of the documents relating to each interest.
- The names of any trusts not created by you of which you are a beneficiary and the names and addresses of the trustees of these trusts.
Personal Information:
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The date you established domicile in the state of your current residence.
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The dates of any marriages, and the locations of any divorce papers or death certificates from prior marriages,
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The names, dates of birth, Social Security numbers and addresses of your descendants (children and grandchildren).
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The locations of federal and state income and gift tax returns you have filed.
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The locations of any safe deposit boxes and where keys are held.
Important people:
- The beneficiaries of your estate.
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Your advisors, including attorneys, accountants, insurance agents, bankers, investment advisors and doctors
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The executor or personal representative designated under your will, the designated trustees of any trusts established under your will, the current trustees of any other trusts you have created, and the successor trustees of any trusts of which you are serving as trustee.
Personal directives:
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A copy of any documents you have signed agreeing to the donation of your organs or body for medical use or research. Also, complete and carry an organ-donation card.
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Any specific wishes relating to funeral or burial arrangements and the location of any cemetery deeds or prepaid funeral expense agreements.
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The location of any last letter to your family or friends, or any video tape of a last statement you may have made.
Who Should Have These Lists?
Now that you have gathered the above information, who are the appropriate persons to receive a copy or at least the location of where the above information is stored?
First, give a family member or close friend a copy of the list of any personal directives that you may have. In most cases, if this information appears in your will, it will be read too late to carry out your wishes,
Second, upon your disability, certain people need to be informed to ensure the efficient administration of your estate. If you have signed a durable power of attorney for financial or property purposes, give a copy of it to both your agent and the successor agent named in the document for safekeeping. in addition, inform each person of the location of your lists of personal and financial information. Also, inform the successor trustee of any living trust you have created and the location of these lists.
Third, upon your disability, you may be unable to inform your healthcare professionals of your healthcare decisions. If you have signed a power of attorney for healthcare, a declaration to physicians, a living will or other health are directive give a Copy to your primary physician, as well as any other regular healthcare professionals, any retirement facility within which you reside, and any healthcare agent or alternative healthcare agent named in the document. In addition, notify your immediate family that such a document has been signed and tell them where it is located.
Finally, inform your family and the designated personal representative of your estate where your lists and, in particular, your most recent will and any codicils, are located.
Peace of Mind
While gathering and maintaining this information may seem time consuming and tedious, providing your family, fiduciaries and trusted advisors with this information will greatly increase the efficiency of your estate administration and help reduce the costs of administering your estate. Plus, it offers you peace of mind knowing that your directives will be carried out to your exact wishes.
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