Is it Time to Review Your Estate Planning Documents?

today’s TOPIC Is it Time to Review Your Estate Planning Documents?

BY » Peter Eisenhauer

When should you review your will, trusts and other estate planning documents? And what should you be looking out for?

“I advise clients that anytime there is a major life change such as a marriage or divorce, the birth or adoption of a child, always look at their estate planning documents,” says Danielle Feller, a family law attorney working in the Statesville office of Daly Family Law. You should also have a review if you have moved from out of state. Outside of such events it is also a good habit to check the documents every few years to see that everything is in order and ask yourself “is that what I still want.” Feller warns that “if you do not tell your loved ones what you want to happen to your estate, the state will tell them.” People assume that if they die without a will everything will go to their spouse so there is nothing to worry about. However that is not always the case.

Estate planning documents comprise: your will, trusts, health-care power of attorney, durable power of attorney for finances, living will (advance directive). When you are setting up or reviewing these instruments, experts also recommend looking at insurance policies and any financial accounts that have beneficiary designations. Feller said she recommends that clients with larger estates also consult with a financial planner or CPA to review the documents for their tax implications.

In addition to making sure our estate is settled according to our preferences, another goal many of us share is to make the process as simple as possible for our loved ones. In addition to making sure your documents are in order, Feller also advises putting as much of your estate as possible in non-probate assets such as insurance policies, accounts that have a beneficiary designation. Joint accounts with survivorship, P.O.D. bank accounts, or living trusts.

A revocable living trust is a way to assign all your assets to a vehicle that is not subject to probate, but settled according to the preferences stated when set up. For those who have a living trust, Feller advises them to be sure that their will has a provision stating that any new assets should be assigned to the trust. This is called a “pour-over will.”

If you find you want to make adjustments, minor changes to a trust can be made with an amendment, and small changes to a will can be made with a codicil. But Feller warns that if there are extensive or numerous changes, it is better to avoid future confusion by replacing the whole document.

Feller advises people who have moved to the area from out of state to make sure your estate planning documents qualify in North Carolina. Along with making sure your will meets all technical requirements in this state it is also best to register new Power of Attorney documents, since banks and other institutions are not required to accept designations from out of state documents.

“Little details can trip you up,” says Amy Shue Isaacs, an attorney with the McIntosh Law Firm, in Davidson. Isaacs works to make sure the process is painless for clients, but stresses the need to make sure estate planning documents meet technical requirements. This is particularly true for people who written their own wills with forms available online. “The substance of the will may be fine, but there are details that need to be done correctly,” Isaacs said. Naming the executor of the will is important, as is the requirement for two notarized witnesses. The goal is to have a “self-proving will” that won’t meet any obstacles when it is offered for probate.

Isaacs notes that the witness requirement can be a problem. She has seen cases where somebody had taken their will to be notarized at a UPS store for example and just asked two other customers who happened to be in the store to sign as witnesses. When questions arose later, nobody knew where to find them. “You may have paid zero dollars for the will, but if an attorney has to spend four hours tracking down the document witnesses, there have been no savings to the estate,” Isaacs said. “It is most often most cost effective to make sure the documents are done correctly to save time and expense later.”

Another tip Isaacs shared is to make sure you and your loved ones know where the original copies of all the documents are. But please not in an extra-creative “safe place” that nobody would ever think to look later on. “Out of sight is out of mind,” she said. “We can forget ourselves where we might have stashed something, and family later on would have no idea. You don’t need to hide your will, just keep it safe.” A safe in the home, or a filing cabinet in the home office are best. Some law firms will keep the original at their offices. In that case it is best to have a copy at home stamped with the information that the original is with the attorneys.

Isaacs also stresses the power and the importance of beneficiary designations on life insurance policies, and retirement accounts, such as a 401k. The designations typically list a primary beneficiary and a successor. These assets are kept out of probate and beneficiary simply has to send the death certificate to get the distribution. Because the designations supersede anything in the will it is very important to keep them updated. Isaacs says it is not at all uncommon for people who have divorced to inadvertently leave a former spouse on a beneficiary designation. That can be an unpleasant surprise for the surviving current spouse.

Changes in tax law might be another reason to review estate planning documents, especially for those with larger estates. Isaacs notes for example that, barring future changes, the current estate tax limit of $12 million will revert to the earlier $5 million limit in 2025.

Trusts also need to be updated to reflect life changes and protect estate assets from creditors or divorcing spouses of adult children, Isaacs said. “As life changes, make adjustments to make your estate planning documents continue to work for you,” Isaacs recommends.

Discover the TerraBella Difference

Experience peace of mind at TerraBella Lake Norman, the only area senior living community with a full range of lifestyle options from our Active Independent Living, to Assisted Living, to our deeply personalized Memory Care. With access to our sensational dining program, a wealth of activities designed for all interests, and a professional team of caretakers, all in an intimate, home-like setting, you’ll make the most of your golden years here at TerraBella. COME SEE WHAT MAKES US DIFFERENT!

Call 704.981.0190 To Schedule Your Personalized Tour

• Lifetime Savings Program

For Veterans

• Offering Active Independent

Living, Assisted Living and

Memory Care Options • Sensations Restaurant-Style

Dining With Tableside Service • Full Kitchens & Kitchenettes

• Weekly Housekeeping,

Laundry, & Linen Services • Outdoor Courtyard &

Walking Paths • Senior Fitness Center with

Specialty Group Exercise

Classes

• Daily Activity Programming

Including Live Entertainment • Free Scheduled Transportation • Game & Card Room with

Billiards

140 Carriage Club Drive | Mooresville, NC 28117

Active Independent Living | Assisted Living | Memory Care

©2022 TerraBella Senior Living. All Rights Reserved. Prices, plans and programs are subject to change or withdrawal without notice. Void where prohibited by law. Managed and Operated by Discovery Senior Living. Limitless 04/2022