By Jennifer Balmos
When most people think of “spring cleaning,” their thoughts turn to messy closets and junk-filled garages. But your home isn’t the only thing that needs attention during this season of tidying and organizing. Chances are, it’s time to dust off your estate plan and take a look at what your documents actually say.
Wills and other documents do not need to be reviewed annually in all cases. But it’s a good idea to think about the last time you looked at them. Has it been several years? Or, since that time, have you experienced a major change such as marriage or divorce, the birth or adoption of a child, the death of a family member, the inheritance of property or other assets or the diagnosis of an illness or disease?
Any and all of the above life events can have a serious effect on your plan. For instance, the birth or adoption of a child brings guardianship questions into consideration. Should you (and/or your spouse) pass away, it is important to consider who would take care of the child. On the flip side of the coin, if you planned to bequeath certain assets to a person who has already passed away, it is time to determine who should receive that gift in his or her place.
Next, even if you have reviewed your plan recently (and have not experienced any major life changes), it is worth asking yourself if your plan is comprehensive. A will is not a comprehensive plan. Do you have a plan in place to designate someone to make health care decisions for you if you are unable to do so yourself? Do you know under which circumstances – if any – you would like to have life-sustaining treatment discontinued? Have you designated someone to make financial decisions for you if you are unable to do so? Are there any limitations you would want place on the person making decisions on your behalf?
Further, anyone taking the time to review his or her estate plan should also consider confirming or updating the beneficiary designations on life insurance policies, IRAs and payable on death accounts. In Texas, minor children (under 18) cannot inherit property. Even if you intend for your life insurance policy to go to your child upon your passing, listing a minor’s name as a beneficiary can create problems down the road.
Having a plan is an important first step, but it is just as critical to make sure your loved ones know and understand your wishes. If no one is aware of the plan you put together (including the documents you executed), the practical result is that your plan won’t do you any good. Part of any review should include providing copies of important documents to family members or close friends, and letting someone know where the originals are kept. Taking these steps gives peace of mind to all involved.
Jennifer practices in Bartonville, and is a member of the National Academy of Elder Law Attorneys. For more information about her practice, please visit www.balmoslaw.com.