Five estate-planning steps to take in the new year

(Tennessean) As we enter a new year, we often set resolutions to improve our quality of life. Often, we think of regular exercise and healthy eating, but we can also resolve to think about financial well-being. This time of the year is a great time to revisit your estate plan so you can ensure your legacy is protected for years to come. Below are some common updates to check off your estate planning to-do list. 

Reflecting on your legacy 

For most, thinking about our own mortality can feel disheartening, so we often avoid thinking about it at all. Unfortunately, as taboo a subject as death is, it is not a question of if but when. Creating an intentional estate plan ensures peace of mind for you and your loved ones. To get started, ask yourself the following reflection questions:  

1. Does anyone rely on you? If so, how would you like to provide for them? 

2. Where do you want your assets to go? Family members, nonprofit organizations, etc.? 

The answers to these simple questions will become the foundation of your estate plan. 

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Meet with your attorney, accountant and financial adviser 

Schedule a meeting with all three professional advisers. Each of them performs a critical role in the estate planning process. When meeting with your attorney, it is important to outline your responses to the initial reflection questions. Then the attorney can begin building your estate plan. Next, meeting with your accountant will ensure you make advantageous decisions related to your tax liability. Finally, it is important to include your financial adviser in these discussions to ensure your financial-planning goals align with your estate-planning goals. After all, your financial adviser will help shape your financial legacy. 

Exercising due diligence during the estate-planning process ensures a corporate trustee, if appointed, can seamlessly step in and carry out your wishes.

Routinely review and update your documents 

A basic will and trust estate planning package may include the following: last will and testament, a living will that details end-of-life care decision-making, a revocable trust, health care power of attorney to handle medical decision-making, and durable financial power of attorney for financial decision-making. 

Our goals and priorities often change, so you should strive to review your estate documents annually to ensure your plan continues to reflect your present circumstances and intent. Changes to family or friendship dynamics or a change in assets could affect your estate plan. Examples include a divorce or remarriage; a family member or a loved one with a disability diagnosis, mental illness or addiction; moving to a new state; or a change in a family business. If there is a change in your circumstances, work with your attorney to update your documents as soon as possible. 

Further, both federal and state tax and estate laws change, so ask your attorney to review your estate-planning documents every three years to ensure accordance with any new legislation.  

Review retirement, investment and trust accounts 

When updating your estate plan, it is critical to ensure your retirement, investment or other accounts achieve your long-term financial goals.  

One of the most common estate-planning mistakes, for example, is forgetting to update the beneficiary designation of your retirement and investment accounts. Often, the beneficiary designation should be changed to the name of the trust created in your legal estate documents. Thoroughly review your accounts each year to ensure everything is accounted for in your estate plan.  

Communicate your intent  

Heirs may include family, friends and charities. It is important to engage in a simple dialogue with your heirs about your legacy and estate plan. Because of the emotional nature of the conversation, it is helpful to start with the basics. Conversations now can prevent conflict later. 

Additionally, make sure that you talk with the individuals named in your documents to serve under your health care and financial powers of attorney and last will and testament so that they are prepared to act when needed. Store your documents in an easily accessible but safe location so that these named individuals can retrieve them at the appropriate time.  

Contemplating and reviewing your estate plan may seem overwhelming, but proactive planning can give you and your loved ones peace of mind.   


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