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New Year’s Resolutions offer us the chance to reflect on the previous year and make informed personal or professional decisions about our lives moving forward.
We recommend you start the new year off prepared by adding estate planning resolutions to your list. Having an organized, comprehensive plan will ensure that your estate and assets be distributed to your family and friends. While losing a loved one can be extremely painful or difficult, estate planning doesn’t have to be. Here are seven important estate planning resolutions to make for 2023.
1. Draft a Will if you don’t already have one.
A valid Will is a document that directs, under the supervision of a probate court, how you want (and to whom you want) to distribute your property and financial assets when you die. Without one, you may open your family up to unnecessary expense and stress, and see your assets pass to persons (or even your creditors) in a way you would never have wanted. In your Will, you should name a trusted executor (such as a spouse, family member, close friend, or, in certain cases, an attorney or CPA), who is willing to be responsible for overseeing the management of your assets after your death.
2. Create a revocable living trust.
A revocable living trust is another estate planning tool that aids in the transfer of property. A revocable living trust can be adjusted at any time during your life and preserve certain assets for specific reasons important to you, such as keeping the family home for your children to continue to be raised in if both you and your spouse die. If you have minor children, a revocable living trust allows you to designate how their inheritance and finances will be managed until they reach an age (or set of ages) you feel most comfortable giving full control to them over their inheritance.
3. Update your powers of attorney, executor, and/or beneficiaries if any family circumstances have changed.
Ideally, the person(s) you name as attorney-in-fact under your powers of attorney and executor in your will is someone you trust to keep your best interests at heart. Unfortunately, your initial choices for these roles may not always remain the same.
A designated attorney-in-fact or executor should be changed in your estate plans if the chosen individual passes away before you, or if other recent circumstances (divorce, bankruptcy, a falling out, etc.) make you feel that they should not be involved in carrying out your final wishes. Be mindful not to appoint someone who could abuse this privilege for selfish reasons.
Similarly, you may want to review your list of beneficiaries to ensure that your selections reflect your current circumstances. For instance, if you are recently divorced, you should review your will and change anything that may be associated with your ex-spouse and their family.
4. Make sure you’ve appointed a legal guardian for any minor children.
No parent wants to think about what would happen if they pass away or become incapacitated while their child is still a minor. However, this is precisely why naming a legal guardian in your Will is so important.
Typically, if you die before the child turns 18, your child’s other parent becomes the legal guardian and assumes responsibility for that child’s care and well-being. If you both pass away (or if the other parent is not involved in your child’s life), naming a legal guardian or guardians in your Will ensures that important decisions about your child’s future are not left to a court or Department of Social Services.
5. Organize your digital assets.
When going through the estate planning process, sorting finances or personal matters may be top of mind. However, organizing your digital assets should be just as important.
Nowadays, it’s common for many people to secure personal information online, whether that be through emails, social media accounts, or even the notes app on a smartphone. To ensure a secure transfer of accounts post-mortem, there are steps you can take in preparation.
Start by recording all digital assets and their respective passwords and decide who will be responsible for the information after your passing. Saving sensitive files to an external hard drive or backing the files up to a cloud-based storage solution guarantees your most important files will be saved.
Many states may also have specific requirements when it comes to digital assets, so it could be helpful to work with an attorney to update documents accordingly. Follow our helpful checklist to ensure your digital assets are as secure as possible.
6. Take steps now to make your future executor’s job easier.
Your future executor plays a large role in how your estate will be handled. Organizing certain documents and having important conversations in advance can help make the executor’s job easier when the time comes.
The first step is to plan ahead and make sure your executor knows that you’ve chosen them and where they can find all important documents. Having these documents in order makes for a smoother transition. Give your executor time to go through them in case they have any questions. Any major life events from the time of designating an executor to the time of death should be noted, including divorce, a new marriage, etc.
Finally, your finances should be in order. Having a list of assets makes it easier for your executor to pay off any outstanding debts. Working with an experienced attorney to draft these documents will ensure an easier transition.
7. Review your entire estate plan and consider whether you need to make any changes.
Your life circumstances can change a lot in a few short years, so be sure to review your entire estate plan and consider whether you need to make any changes, especially if you have yet to do so recently. When making these updates, ensure that all your retirement accounts, joint properties, life insurance, and beneficiary designations are recent.
Major life events may include getting divorced, remarried, adopting a child or giving birth, death of a spouse or a child, incapacitation, death of a designated beneficiary, a personal health decline, or a significant change in assets. If these don’t apply, it may still be beneficial to review your estate plan annually to reflect your most up-to-date wishes. The more current your estate plan, the easier it will be for your executor to carry out your requests.
It’s important to determine whether the state you live in has any special requirements for updates to your estate plan, and working with an experienced attorney can help.
Get help keeping your estate planning resolutions.
The best way to keep your 2023 estate planning resolutions is to work with a knowledgeable estate planning attorney. The Law Office of Patricia E. Tichenor, P.L.L.C. has over 20 years of experience serving the needs of Virginia families, and we can help you with creating or updating your estate plans. Contact us today for a free consultation to learn more.
Selecting someone you trust to be an executor of your Will is an important decision. Being an executor means dealing with significant responsibilities at a time when that person is experiencing the stress and grief of a meaningful loss.
Preparing your future executor to do this sometimes-challenging job with confidence and ease is as important of a step in estate planning as drafting your Will. Here are five steps you can take now to make your executor’s job easier when the time comes.
In addition to a Will, an executor will need to know where to locate certain critical information for you at the time of your death, including a summary of your financial accounts, credit cards or other liabilities, whether you have any life insurance or annuities that need to be dealt with, if you have any prepaid funeral or other arrangements/wishes regarding the disposition of your body, and, to some extent, if possible, a way to access funds to cover any final expenses like additional funeral costs or medical bills pending qualification to administer your Will.
By planning ahead, you can let your executor know where they can find important documents and how to access your records and accounts. You can also set up a way for them to easily access funds so they don’t have to use their own money to cover unexpected costs. Additionally, details can change before you pass that might require you to revise your Will. Keep your executor involved by regularly updating them throughout the process.
Make sure that they will have access to your home after you die and be able to secure your belongings in order to do their job.
Get your documents in order
Even the best-written documents can cause confusion. Review these documents with your executor so there’s no second-guessing your wishes and they can ask questions about your instructions or assets. Make sure they understand what’s passing through your Will and what’s passing to directly named beneficiaries outside your Will, along with contact information for your beneficiaries.
As the executor proceeds to carry out your final wishes, they may need more information, like your financial or personal documents. As you prepare your Will, you can gather and store these documents in a binder where they’re easily accessible.
Here are several important documents to prepare now to make your executor’s duties easier:
- Birth and/or death certificates. In addition to your own birth certificate, this includes the birth certificates of minors or dependents involved in the Will. These documents can be crucial for the executor to gain access to your assets.
- Marriage licenses and/or divorce certificates. Any current or past significant other may be involved in your Will’s execution. These documents can clear up potential misunderstandings or disputes.
- Deeds and titles to property. Property may include personal or commercial real estate as well as vehicles.
- Mortgage information. Include the details of any debts, including mortgages.
- Insurance policy information. Include your life insurance policy’s details as well as a list of beneficiaries.
- List of all bank accounts. In addition to the account number and the name of the bank or credit union, include online access information if available.
- Investment portfolios. Provide your policy information, the name of the institutions, designated beneficiaries, account numbers, and account information to access your investments.
- Funeral plans and burial plot information. Decide on your cremation or burial preference so your executor doesn’t have to make the difficult decision for you.
- Contact information for your professional advisors. Even when you’re well prepared, your executor will likely still have questions or need advice. Give your executor the contact information for the professional advisors overseeing your assets such as your lawyer, insurance agents, accountants, and/or financial advisors.
Update plans after significant life events
A Will is never set in stone until you’ve passed away. When you’re alive, treat your Will as a living document that updates and grows with you. Whenever you have a significant milestone, update the Will to reflect any changes in assets or updated information such as insurance policies or professional advisors. Common milestones include births, adoptions, marriages, divorces, or the death of any currently listed beneficiaries.
Organize your finances
When creating your estate plan, make notes of all your assets. When you pass, your executor will first need to use those assets to pay off any remaining debts and taxes.
Once all the debts and taxes are taken care of, the executor can distribute any remaining assets among your chosen beneficiaries. Make it easy for them to avoid disputes or arguments over who gets what by giving them the answer while you’re still around.
Work with an experienced attorney to draft your estate planning documents
There are many factors that go into setting up the executor of your Will for success. The Law Office of Patricia E. Tichenor has more than 20 years of experience in helping Virginia residents plan and prepare everything they need to make their executor’s duties go smoothly.
Set up a free consultation today to let us guide you through the process of ensuring that both you and your executor are prepared with all the resources you both need to carry out your final wishes.
Certain life events may warrant an update to your estate plan, such as changes to your marital status, family members, or your assets. It’s critical to review and update your Will and other estate planning documents after such a milestone; otherwise, your most up-to-date wishes may not be carried out if you pass away unexpectedly.
Here are six major life events that may require you to update your estate plan.
When you tie the knot, make sure your new spouse is added to your estate plan per your wishes (and considering the terms of any premarital/prenuptial agreement you may have signed), after your marriage. If applicable, you may want to add your new step-children to your estate plan as well.
However, you do not have to be legally married to rethink your estate plan. People in domestic partnerships can also add significant others to their estate plan at any time. Keep in mind that if you are not in a legally recognized marriage, your partner may not receive anything upon your death unless it is clearly laid out in your estate plan or you have named them as your pay-on-death or transfer-on-death beneficiary for all of your financial accounts and home (if applicable).
If you are recently separated or divorced, you should to remove your previous spouse from your Will or any payable-on-death accounts and update the beneficiary information to either your children, a friend, or another family member. More importantly, if for some reason you wish to maintain an ex-spouse as your beneficiary for any reason, you must sign a new set of estate planning documents that are dated after your date of divorce, because Virginia statutes provide that a divorce effectively disinherits your spouse on your older documents and also removes them as an executor or agent under a power of attorney.
If you are a parent of a minor child, it’s critical to have an estate plan that lays out exactly how you would like your children to be cared for if you pass before they turn 18 years old. This includes appointing a guardian if something were to happen to both you and your spouse or partner, or addressing what role you may want your new spouse as a step-parent to have in your child’s life if you predecease them.
If you’ve recently had a child, adopted a child, have a new grandchild, or want to add your step-children to your estate plan, write out your wishes clearly in your Will, including whether the new members of your family will become beneficiaries to parts or all of your estate.
4. Incapacitation or death of a major beneficiary
You should rethink your estate plan if a major beneficiary such as a spouse, child, parent, or sibling dies or becomes seriously injured or incapacitated. You may want to remove them from your Will and change your beneficiary information. Alternatively, you can change how much or how little the injured or incapacitated beneficiary will receive from your estate or, if you are their guardian, how they will be cared for after your death. This may include determining whether you need a Special Needs Trust for an incapacitated child or other adult family member. You’ll also need to change your Will if you had appointed the person as the sole executor of your estate and did not choose a backup.
5. A personal health decline
Review your estate plan if you have significant negative changes in your personal health, such as a debilitating accident or a major medical diagnosis. You may want to create or update your power of attorney documents to ensure an agent is appointed to make health or financial decisions for you in the case of incapacitation, cognitive decline, or coma. When choosing your agent, make sure you pick someone you can trust to act on your behalf, be an advocate for you, and keep your wishes in mind.
6. Significant changes in assets
If you’ve recently acquired more assets, such as through the inheritance of a parent’s estate or winning the lottery, you may need to make changes to your estate plan. The number of assets you own in total will affect how much your beneficiaries will receive so it’s essential that you specify these assets in your Will. This also goes for assets you no longer own that need to be removed or replaced.
Even if you’ve had no major life changes, it’s still a good idea to review your estate plans at least once every year or so to ensure it aligns with your current wishes. If you need help with this task, The Law Office of Patricia E. Tichenor, P.L.L.C., is here to help. Schedule your free virtual consultation with one of our experienced attorneys today.