As you move through retirement, keeping your estate plan organized and current becomes increasingly important. Here are the key areas to address:
Review and update your Will.
Major life events have a way of making estate documents outdated without anyone realizing it. A marriage, divorce, new grandchild, death in the family, or move to another state are all good reasons to pull out your will and give it another look.
- Confirm your beneficiaries still reflect your wishes and current family circumstances.
- Make sure your named executor is still willing, able, and well suited for the responsibility.
- Revisit how your assets will be distributed, particularly if you’ve bought or sold significant property since your last review.
Revisit your Powers of Attorney.
Someone who was the right choice years ago may not be the right choice today. Health issues, distance, family dynamics, or simply the passage of time can all affect your current choices.
- Financial Power of Attorney: Confirm the person you’ve chosen is the right person to manage financial matters if you become unable to do so yourself.
- Medical Power of Attorney: Make sure your healthcare proxy is someone you trust to make medical decisions consistent with your wishes.
Review your Advance Medical Directive.
An Advance Medical Directive puts your wishes for medical and end-of-life care in writing. It’s an important document for you, but it can be just as important for your family. Having a directive tucked away in a file cabinet isn’t enough if no one can find it when it matters. Make sure the people who may need to act on your behalf know it exists and how to access it.
- Review your preferences for end-of-life care and medical treatment.
- Discuss those wishes with your family, healthcare proxy, and physicians.
- Make sure the appropriate people know where the document is kept.
Check your beneficiary designations.
Beneficiary designations on accounts such as retirement plans, life insurance policies, and annuities generally determine who receives those assets directly. Make this part of your annual financial review and revisit it after any significant family change. It’s a relatively simple step that can prevent some very complicated problems later.
- Review beneficiaries on all retirement accounts, life insurance policies, and annuities.
- Make sure contingent beneficiaries are named where appropriate.
- Check for former spouses, deceased beneficiaries, or other outdated designations.
Confirm how your accounts and property are titled.
How you actually own your assets matters. Whether an account or property is owned individually, jointly, or through a trust can affect what happens to it at death and whether it passes through probate. Your estate documents and the actual ownership of your assets need to work together.
- Confirm that assets are titled appropriately – individually, jointly, or in the name of a trust.
- Review joint ownership arrangements.
- Make sure transfer-on-death (TOD) and payable-on-death (POD) instructions are consistent with the rest of your estate plan.
Determine whether a trust makes sense.
Not every retiree needs a trust. But under the right circumstances, a trust can be a useful tool for simplifying the transfer of assets, maintaining privacy, managing assets for beneficiaries, or addressing complex planning needs.
- Consider whether a revocable living trust could make administration easier or help avoid probate for certain assets.
- Discuss whether an irrevocable or special-purpose trust makes sense for tax, charitable, long-term care, or other planning objectives.
- If you already have a trust, confirm that it is properly funded and that the appropriate assets are titled in the trust’s name.
Get your important documents organized.
A well-designed estate plan isn’t very helpful if no one can find it. Your executor, power of attorney, and other key people should know what exists and where to locate it if needed. Consider maintaining secure digital copies as well as paper. Your estate file should include:
- Will and trust documents
- Powers of attorney and medical directives
- Life insurance and annuity information
- Deed, titles, and important property records
- Recent tax returns and investment account information
- Contact information for your attorney, CPA, financial advisor, and other key professionals
Don’t forget your digital estate.
For many of us, a meaningful part of life now exists online. Email accounts, social media, cloud photo libraries, financial apps, subscription services, and digital assets can all create questions for family members after someone dies.
- Maintain a secure inventory of important online accounts and a safe method for accessing necessary credentials.
- Decide what should happen to social media accounts, digital photos, cryptocurrency, and other digital assets.
- Review whether important platforms allow you to designate a legacy contact or similar person.
Revisit estate taxes and gifting.
Tax laws change, and your financial situation may change right along with them. Even if estate taxes weren’t a concern when you originally created your plan, growth in your investments, real estate, business interests, or other assets can make it worth revisiting the numbers.
- Review your potential federal and state estate or inheritance tax exposure under current law.
- Consider whether lifetime gifting fits into your broader financial and legacy plan.
- Evaluate charitable giving strategies if philanthropy is important to you.
- Coordinate tax-sensitive decisions with your financial advisor, CPA, and estate planning attorney.
Talk about the plan.
Your family doesn’t necessarily need to know every detail of your finances. But the people who are responsible for carrying out your wishes should understand their roles, know where important documents are located, and have a general sense of what you’ve put in place. You want to make sure the right people aren’t left guessing when the time comes.
- Talk with the family members and fiduciaries who have important roles in your plan.
- Make sure your executor, powers of attorney, and trustees understand what will be expected of them.
- Keep your financial advisor, estate attorney, and CPA updated when your plan changes.
Disclaimer: The information above is for general educational purposes only and should not be considered financial, tax, or legal advice. Always consult with a qualified professional regarding your specific situation. You should consult with your CPA and/or attorney before implementing any estate planning, gifting, or tax-related strategy.