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.