Spring Cleaning means saying goodbye to fabric-deprived shorts, jeans that have not seen legs since 1988 and place mats that have absorbed too many mac and cheese drippings. Is there a better feeling than opening the windows and letting the sunshine illuminate a year’s worth of dust particles? Probably not, but a close second is the annual opening of the strong box to see if your estate plan still makes sense.
Did your proposed executor call you names during Christmas? Did a beneficiary leave the yearly Groundhog’s Day Barbecue 2 hours early using a questionable excuse? Maybe nothing quite as drastic happened over your holidays, but it is worthwhile to review Beneficiary Statements, Advance Directives, Wills and Trusts. It is possible that one element in your estate plan has been neglected or still reflects an old and outdated family dynamic.
For example, Wills that were executed when a couple’s children were minors focused on guardians. Now those children are 40 and 42. Your needs and their needs have changed significantly. This new reality should be reflected in your estate plan. More frequently, beneficiary statements have not been updated to match estate planning instruments. Since Beneficiary Statements and Joint Accounts with Rights of Survivorship allow for transfer of funds by operation of law with just a death certificate – outside of the estate process- this may not be the optimal or planned result.
Who the important people in your life are in a given moment varies. Your fiduciaries – Health Care Proxy, agent under a Power of Attorney, Trustee, and Executor may exert an extremely powerful influence over your life and affairs. Making sure that these people are the right people for you now is something that must be contemplated. Revocable Trusts, Wills, Powers of Attorney, and Health Care Proxies can be changed, revoked or redrafted.
Sometimes plans change. That move to Idaho may not make sense since your son and daughter moved back to New York and have asked you to babysit their 7 children. Spring-time conversations with family about planning and roles may prove more fruitful than a few words offered during the depths of winter.
A major consideration is the legal effect of existing documentation. Older Power of Attorney forms may not have Trust creating language or other major provisions that will be required for certain Medicaid Planning. Newer forms such as the MOLST form for end of life health care decisions should be discussed with your elder law attorney. Relying on 20 or 30 year old legal documents to protect you is not sound planning.
Federal and New York Estate tax changes have also altered the trajectory of many estates. The current Federal exemption is $11,180,000., while New York’s is $5,250,000. With Federal Estate Tax portability and increased exemptions, tax planning that may have once been considered prudent may now require an alternative review.
Your financial and estate spring cleaning should also include insurance policies, managed portfolios, retirement and pension funds. Spring is a great time to undertake this project. Good weather allows for easier travel to appointments. It is difficult to accomplish some tasks if your driveway has 20 inches of snow every third day.