New Years Resolution: Top 10 Reasons to Review Your Estate Plan

#10. Under your existing estate planning documents, who will be charge of your financial affairs if you become ill? Who did you name as your successor trustee and as your attorneys-in-fact under your durable general power of attorney? Has your opinion changed since the time that your trust and power of attorney were signed?

#9. Under your existing advance health care directive, who will be your health care advocate if you become unable to give informed consent to medical decisions? Who did you name as the alternates? Has your opinion changed since the time that your advance health care directive was signed? Did your document state your wishes about “heroic measures,” home health care, organ donation, burial/cremation, and who will be in charge of your memorial service/funeral? Does your document have powers dealing with dementia or Alzheimer’s?

#8. Are your “after income tax” (or “income tax deferred”) assets titled to your living trust? Do you have assets titled in joint tenancy that really should be held in your living trust? Are your assets titled correctly for tax purposes and for avoiding probate?

#7. Do the primary and secondary beneficiary designations of your IRAs, SEP/IRAs, 401(k), 403(b), pension plans, and other income tax deferred assets correctly state who is to inherit those “pre-income tax” assets? Or are these beneficiary designations out of date?

#6. Under your existing living trust and will, who will inherit your estate? How, when, and what will your beneficiaries inherit? Have your inheritance wishes changed since the time that your living trust and will were signed? Has the size of your estate changed drastically since your documents were signed?

#5.  Have the life circumstances of your beneficiaries changed dramatically from the time that your estate documents were signed? Since the date that your estate documents were signed, have you changed your opinion as to what is best for your beneficiaries? For example, since the date that your living trust and will were signed:

  • has a beneficiary’s financial responsibility or trustworthiness changed?
  • has a beneficiary’s health become a concern to you?
  • is a beneficiary now on Medi-Cal or other important government benefits?
  • is a beneficiary’s marriage now of concern to you?
  • have hostilities or conflicts developed involving a beneficiary that warrant changes to your trust and will?
  • if you have minor children, is your designed guardian for them still correct?

#4.  What is your plan for payment of your future home health care or long term care, if needed? If you want your estate to have the option to have California pay for your skilled nursing care under the Medi-Cal program, then your durable general power of attorney should be reviewed and updated if it does not include so-called “Medi-Cal planning power” in it. Should there be changes to your assets to make yourself more “self-insured” for home health care or long term care? Should you consider long term care and home health care insurance?

#3. Does the current assessed value (not fair market value) on your California property tax bill of all of your California real property exceed $1,000,000? If so, then your estate plan should be reviewed to avoid a possible increase in real property taxes on your death (as there is a limit on how much real property can be inherited by your children without triggering an increase in property taxes).

#2.  Has your health or financial or family situation or your wishes changed significantly from the time that your estate documents were signed? If so, review your estate documents to make sure that they will still accurately reflect your wishes.

#1 MOST IMPORTANT REASON TO REVIEW YOUR ESTATE PLAN is to have it reviewed in light of the upcoming, 2017 tax changes to be enacted by the Republican Congress and signed by President Trump, including the possibility of repeal of estate tax and the uncertainty of what will happen to stepped up cost basis on death and the uncertainty of gift tax and generation skipping transfer tax.

Copyright by James J. Phillips 1/1/17