As 2024 winds down, it’s important to review and consider making revisions to your estate plan. Most people believe that once estate plans are created, they never have to look at them again. But a great deal of life can happen in a year, and you are probably in a different place than where you were 12 months ago. If it’s been a while since you’ve looked at your estate plan, schedule an appointment with Verras Law.
Your Last Will and Testament
In the last year, you may have had a divorce or welcomed a new child into the world. Perhaps the person you wanted to serve as executor has become incapacitated, or a desired heir has passed away. Regardless of your life circumstances, take a look at who is in charge of administering the estate and who is inheriting from it. If for any reason these individuals need to be changed, it’s time to update your will. The same is true if your assets have changed significantly since last year.
Federal Gift Limit
The annual gift tax exclusion (also known as the gift tax limit) is the amount of money someone can give away without having to report it. In 2024 the amount was $18,000; any amounts above this must be reported to the IRS. Gift giving is a strategic way to bequest part of your estate without having to incur taxes, so ask an experienced attorney how you can use the gift limit to your advantage.
Retirement and Life Insurance Beneficiaries
Marriage, divorce, and death are three specific life events that can impact who you have named as beneficiaries to your retirement and life insurance plans. Another possible change that may affect you is if a beneficiary has developed an addiction or other problem that would make the individual irresponsible with any money they might inherit from you.
Healthcare Proxy and Durable Power of Attorney
A healthcare proxy is a legal document that designates someone to make medical decisions on your behalf if you are incapacitated. Advance healthcare directives and living wills are similar. Meanwhile, a durable power of attorney identifies someone who can make financial and property decisions if you are unable to do so. If you do not have these documents in place, or your agent or proxy has died or otherwise become unavailable, it’s time to meet with a lawyer.
Asset Inventory
Your property inventory can easily change in the course of a year. Perhaps you have acquired stocks or bonds in the last 12 months, or maybe you bought and sold real or personal property. You may have even done something as seemingly minor as open a new bank account. Keeping an updated and detailed list of your assets can help make sure that, upon death, all of your property is dispensed according to your wishes.
Trusts
Trusts are used to preserve assets, reduce taxes, avoid probate, and provide for your loved ones in a structured and strategic manner. As with other estate planning instruments, you should review who is in charge of the trust (trustee) and who would benefit from it (beneficiaries) and determine if modifications should be made.
Notify Your Family and Financial Professionals
After you have made updates to your estate plan, you should inform your family, financial planners, and other financial professionals you work with. Doing so can eliminate much of the guesswork that many families must do after the death of a loved one. You should especially notify any new individuals you designate as an executor, trustee, or some other fiduciary.
Review Your Plan With an Estate Planning Attorney
No matter the nature of your estate plan, updating it with the assistance of an experienced attorney can help ensure that your wishes and legacy are realized after you pass. If you have never created an estate plan, our firm can also assist you. Give Verras Law a call to get started today.