Review Your Estate Plan Annually

We recommend that you review your estate plan annually to ensure it accurately reflects your wishes. In reviewing your estate plan, ask yourself the following questions to determine whether your plan is current or whether it needs to be reviewed and updated:

  1.  Under your existing estate planning documents, who will be charge of your financial affairs if you became so ill that you could not manage them on your own? Who did you name as your successor trustee and as your attorney-in-fact under your durable general power of attorney?Has your opinion changed about who should be in charge of your financial affairs since the time that you signed your trust and power of attorney?
  2.  Under your existing Advance Health Care Directive, who will be your health care advocate if you became unable to give informed consent to medical decisions? Who did you name as the alternates? Has your opinion changed about who should be your health care advocate since the time that you signed your Advance Health Care Directive? Did your document accurately state your wishes about “heroic measures,” home health care, organ donation, burial or cremation, and who will be in charge of your memorial service or funeral? Does your document have powers dealing with dementia or Alzheimer’s disease?
  3.  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?
  4.  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 Or are these beneficiary designations out of date?
  5.  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 you signed your living trust and will? Has the size of your estate changed drastically since you signed your documents?
  6.  Have the life circumstances of your beneficiaries changed dramatically from the time that you signed your estate documents?Have you changed your opinion as to what is best for your beneficiaries? For example, since the date that you signed your living trust and will:
  • 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 that could be jeopardized by receiving an inheritance?
  • 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 designated guardian for them still correct?
  1. 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?
  2. Does the current assessed value on your California property tax bill (not fair market value) 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).
  3. Has your health, 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.
  4. Have the estate tax portions of your trust been reviewed in the last 5 years? Given the enormous changes in the estate tax laws that took effect January 1 of this year, all living trust plans (particularly for married couples) should be reviewed and, as needed, updated to conform to the new tax laws.

Copyright 2018 Law Offices of Phillips & Phillips