Spring Cleaning Your Estate Documents

Spring Cleaning your documents

Spring Cleaning used to be a time when we really cleaned…

Now it’s an expression for an exercise where many of us resolve to “Get Organized” or “Get My Affairs Simplified” or some version of launching a new year with a better version of the old.

 As we age this effort at organization usually turns to documents and legacy decisions. Knowing our lives are often complicated, and scattered, we realized that wrangling the disparate pieces every once in a while is a very good practice. You may be a long way from anything final, but imagine if you or a loved one were facing something final. A very good friend of mine who is an Estate and Trust attorney has often said, “Plan your retirement as if you will live forever; plan your Estate and Final Affairs as if you will die tomorrow.”  

            Here is an abbreviated list of items to review:

  1. Will and Power of Attorney documents. Are the names of people responsible for you at your end of life and beyond still the right choices? Are the right people matched with the right skill set?
  2. Review insurance policies, annuity contracts, Payable or Transfer on Death brokerage and bank account registrations, pension and trust documents. Are the beneficiaries named still who you want to inherit the account? Is there a better choice of named beneficiaries when looked at from a taxation viewpoint? If the primary named beneficiary is deceased, do you still like the Contingent Beneficiary, and if there is no one so named, get with your advisor very soon to name a new Primary Beneficiary.
  3. Review your Charitable Bequests in your Wills and Trusts. Do you see any you want to change? Check the balance in the accounts intended for the charity to verify that your intended gift can still be funded with the named account. As you spend down your assets the remaining balance in an account can come up woefully short of your intended gift.

Remember that your named Trustee or your Executor is a Fiduciary. As such he or she is required to carry out your wishes as you have written in your document.

Even if you say it should be changed to something else, let’s say on one of your last days, the Fiduciary’s responsibility is to follow the document. As for the beneficiary designations, the financial institution will pay the appropriate proceeds to the named person or charity. A request from the Executor after the fact, with rare exception, cannot change how those proceeds will be paid.

If this seems a bit overwhelming even for the most committed organizer, then you will understand why we developed Now Transitions™. Working with a professional can often tame what seems to be the chaos of forms and old paperwork to tell you what you have said, who gets what, and how it should all be distributed. Getting to this conversation before it is urgent is our recommended Best Practice for a better 2021 and beyond.