You’ll be able to avoid common problems and have a more effective estate plan by being mindful of some simple but important details, according to a recent article, “7 Estate Planning Best Practices,” from Kiplinger.
Name more than one person for essential roles in your estate plan. An executor is the person who will carry out the instructions in your will. What happens if they cannot serve or decide they don’t want to? Always make sure to name an executor and a successor executor. The same is true for your Power of Attorney, Healthcare Agent, and, if you have a Revocable Trust, your successor trustee. If most of the important people in your estate plan are around the same age as you, it’s wise to name younger people as backups.
Talk with your loved ones about where your estate planning documents can be found, including how to access them. They’ll need to be able to find them, for starters, and then learn how to open them if they are in a secure location. Don’t surprise loved ones by adding turmoil to their grief.
Talking about your estate plan includes talking about the intentions behind the estate plan. You may wish to create a letter of intention, explaining your reasoning behind the estate plan. It’s not legally enforceable, but it might preclude ambiguity and possibly prevent family disputes. If you don’t, you add the possibility of family fights, litigation and even the dissolution of family relationships over the generations. People fight about money, whether we like to acknowledge this or not.
Work with an experienced estate planning attorney who knows your state’s laws. Estate planning laws are state-specific, and someone who is a terrific attorney in Colorado won’t necessarily know the law of Texas. If you move to a different state, you’ll also need to update documents to be sure they will work in your new home.
If you’re a pet owner, don’t neglect planning for your pets. Your will can include a provision about caring for your pets and include a bequest to care for your pets. However, this is not enforceable. On the other hand, a pet trust can name a trustee to manage the funds for the pet’s benefit and name a person to serve as a caretaker.
Don’t wait until a medical emergency to give your healthcare providers copies of relevant estate planning documents. Ask your estate planning attorney and your doctor about giving your healthcare team documents like a living will, power of healthcare attorney, living will and other related documents. Most healthcare systems today have patient information portals where they can be stored.
Did you create a trust but haven’t yet funded it? If you don’t retitle your assets so they are inside of the trust, your trust won’t perform as intended. This last step has to happen for the trust to be effective.
Review your estate plan on a regular basis. Most estate planning attorneys recommend reviewing an estate plan every three to five years, and more often if there have been large “trigger” events like marriage, divorce, death, or birth. If you move to a new state, you’ll also need a review to be sure your estate is still valid in the new state.
Your estate is like your car: without regular maintenance, it will not perform well and, over time, will stop running. Call your estate planning attorney to make sure that your documents are in order for the new year.
Reference: Kiplinger (Jan. 6, 2025) “7 Estate Planning Best Practices”