Your Mid-Year Estate Planning Checklist: 10 Things You Should be Doing Now

Here is a helpful checklist of the top ten ways to keep your estate plan current. 6.29.17

  1. Review your existing Will and any trust agreements. Over the course of a year our personal and our professional lives can change dramatically. Tax laws and regulations are also subject to change as new political administrations come into office. It is therefore important to periodically make sure that your documents will work the way you want them to. Some questions to ask: Is your plan tax efficient? Do you need to make any changes about the timing and manner in which your assets will transfer to your beneficiaries? Do you need to change any beneficiaries or add anybody new? These are all basic questions to keep in mind when reviewing your existing documents.
    Consider whether your named fiduciaries are still appropriate. Your executors and trustees will be tasked with some significant responsibility. You should consider whether the persons you appointed in your documents are up to the tasks that lie ahead of them or if an alternate person or persons should be appointed.
  3. Review your beneficiary designations. Assets that pass by beneficiary designation, such as life insurance and retirement accounts, are typically not controlled by the terms of your Will or any trust agreements. Rather, they pass directly to the named beneficiary(ies) regardless of the status of their relationship with you. For example, a divorce will not automatically revoke an existing designation to your former spouse. Thus, it is important to check the status of each beneficiary designation on file with the respective institutions to be sure that the beneficiaries you want to receive those assets are in fact listed as the primary and/or contingent beneficiaries.
  4. Review your financial powers of attorney. Texas enacted a new Power of Attorney statute that includes the right to have digital assets shared, accessed, or managed by your POA. While Powers that were executed prior are still effective, it would be advisable to execute new Powers that reflect the changes to the law to facilitate their acceptance by online platforms, banks and other institutions that will rely on the legality of those forms.
  5. Review existing insurance coverage (life, homeowners, umbrella, disability, Long Term Care, etc.). As your assets and liabilities change, your liability exposure also changes. It is important to review your current policies and personal circumstances to determine whether you need an increase in coverage or if underwriting new policies are appropriate and/or warranted.
  6. Review your investments – and your investment advisors. Are you satisfied with the way your accounts are performing? How much did you pay in fees last year? Is your investment advisor held to a fiduciary standard, which keeps your best interests above all else, or to the less-stringent “suitability” standard? You should not “set and forget” your investments and your portfolio, nor should you avoid asking these questions of your advisors.
  7. Review how your assets are titled. Depending on your circumstances, it may be advisable to re-title assets from one spouse to the other, or from a joint tenancy into a tenancy in common. You may also want to fund your trust(s) with various assets (discussed further, below).
  8. Fund your trust(s). Avoiding a lengthy probate process is one of the many reasons why our clients fund their trusts during their lives. While a funded trust will shorten the process and procedures that your fiduciaries will need to undergo in order to take control of your assets after you die and manage and/or distribute them to your beneficiaries. Privacy concerns, disability planning, public benefits planning (including Veterans and Medicaid), and estate tax planning are equally important in considering whether it makes sense to fund some or all of your assets into trust during your life rather than at death.
  9. Determine/confirm your Homestead exemptions. Do you qualify for one? The Texas Tax Code allows for certain exemptions to your yearly property tax bill if you have a homestead exemption. This must be filed for before the “delinquency” period, which is generally considered to begin on February 1 in Harris County. Other counties may vary. Once you’ve filed for your residence homestead exemption and qualified, your exemption will carry over every year. However, many people do not know that, once they turn age 65, they can qualify for an additional $10,000 exemption! This does require filing for another exemption with your county of residence. To determine whether you have a current homestead exemption, check your county assessment district’s website or your yearly tax valuation.
  10. Get educated–meet with your Houston estate planning attorney and financial professionals to discuss all of the above. Ask if they have educational presentations or workshops! The more you know about your assets and the laws applicable to their transfer, the better your estate plan.

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