What Needs to Be Reviewed in Estate Plan?

What Needs to Be Reviewed in Estate Plan
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Here are some important parts of your estate plan that should be reviewed.

When it comes to drafting a will and other estate planning documents, note that you probably should revisit them many times before they are needed, advises CNBC’s recent article entitled “Be sure to keep your will or estate plan updated. Here are three key reasons why.”

It would be best to give these end-of-life legal papers a review at least every few years unless there are reasons to do it more often. Things like marriage, divorce, birth, or child adoption should necessitate a review. Coming into a lot of money (i.e., inheritance, lottery win, etc.) or moving to another state where estate laws differ from where you drew up your will means that you should review your plan with an experienced estate planning attorney.

Only about 46% of U.S. adults have a will, according to a 2021 Gallup poll. If you are among those who have a will or full-blown estate plan, here are some things to review and why.

Even though your will is all about you, there are other people you need to rely on to carry out your wishes. This makes it essential to review who you have named to be executor. They must liquidate accounts, ensure your assets go to the proper beneficiaries, pay any debts not discharged (i.e., taxes owed), and sell your home. It would be best to be sure that the guardian you have named to care for your children is still the person you would want in that position.

As part of estate planning, you may create other documents related to end-of-life issues, such as powers of attorney. The person responsible for decisions about your health care is frequently different from whom you would name to handle your financial affairs. It would be best if you looked at both of those choices.

Even if you have experienced no major life events, those you previously chose to handle specific duties may no longer be your best option.

Remember that some assets pass outside of the will, including retirement accounts like a 401(k) plan, IRAs, and life insurance policies. This means the person named as a beneficiary on those accounts will generally receive the money no matter what your will states. Bank accounts can have beneficiaries listed on a pay-on-death form, which your bank can supply.

If a beneficiary is not listed on those non-will items or the named person has already passed away (and there is no contingent beneficiary listed), the assets automatically go into probate.

Reference: CNBC (Jan. 27, 2022) “Be sure to keep your will or estate plan updated. Here are three key reasons why.”