When was the last time you examined your estate plan? If the last time you looked at these documents was when your attorney drafted them, you are not alone. In fact, most people go 20 years or more between making updates to their estate plans. For example, people tend to draft a will when they first have children and then do not update it until the children become adults. However, there are other reasons why you should update your estate plan.
While you should definitely make updates when major life events occur such as divorce or retirement, there are other reasons like changes in the tax law that should trigger updates to your estate plan. The following includes some of the most common reasons why you should update these documents.
You are missing one of three essential documents
At the very least, you should have a will and financial and health care powers of attorney. If you have only a will, it is past time to make some changes to your estate plan in order to include the additional powers of attorney. You may also want to consider adding a trust to your estate plan.
Your health care power of attorney is missing key provisions
There are five essential provisions that your health care power of attorney should include. First, you should appoint a patient advocate and a minimum of two back-ups that can make health care decisions for you in case you become incapacitated. Also include the provisions of the Health Insurance Portability and Accountability Act (HIPAA) that allow your chosen representative to have access to your medical records and speak with your doctors and other medical providers.
If you want to make an organ donation at the time of your death, you can also add this in the health care power of attorney so that your representative can ensure it happens. Additionally, you should consider putting in mental health care powers so that your representative can make decisions for you if you suffer from dementia or another debilitating mental condition. Finally, be sure to include living will provisions to address continuing or ending artificial life support.
Your trust is less than fully funded
If you have created, or plan to create, a trust to hold your assets for your beneficiaries, be sure it is fully funded while you are healthy. For example, you can move your bank accounts, investment portfolio and other property in Cocoa into the trust while you are still of sound mind and body. If you so choose, you can also name your trust as the beneficiary of your life insurance policy and retirement assets.
If you have not updated your estate plan since your children were born, now is the time to do so. Also, if any of the above situations apply, take the time to make the necessary changes to your will and other documents.