Estate Planning Documents You May Want To Review Periodically
Estate planning is often associated with creating a will, but a comprehensive estate plan typically includes several important legal documents. Once these documents are completed, it can be easy to file them away and assume they no longer require attention.
Over time, family relationships, financial circumstances, healthcare preferences, and even state laws can change. While estate planning documents are designed to provide guidance during important life events, they may only reflect your wishes if they remain current.
Periodically reviewing your estate planning documents can help you identify whether updates may be appropriate based on changes in your life and long-term financial goals.
What Are Estate Planning Documents?
Estate planning documents help communicate your wishes regarding your assets, healthcare decisions, and financial affairs if you become unable to make decisions yourself or after your death.
While each person’s estate plan is different, several documents are commonly included.
Your Last Will And Testament
A will outlines how you would like your assets distributed after your death. It may also identify an individual to administer your estate and, if applicable, name guardians for minor children.
Many people create a will after getting married, starting a family, or purchasing significant assets. However, a will created years ago may no longer reflect current family relationships or financial circumstances.
Life events that may prompt a review include:
- Marriage or divorce
- The birth or adoption of children or grandchildren
- The death of a beneficiary or executor
- Significant changes in assets
- Moving to another state
- Changes in personal wishes
A periodic review can help ensure your will continues to align with your current intentions.
Your Trust (If Applicable)
A trust is an arrangement that can facilitate the transfer of property to beneficiaries. It will also identify an individual (trustee) to manage the assets in the trust for the benefit of the beneficiaries and if appropriate, distribute those assets to the beneficiaries, per the guidelines laid out in the trust.
Many people create a trust after getting married, starting a family, or purchasing significant assets. However, a trust created years ago may no longer reflect current family relationships or financial circumstances.
Life events that may prompt a review include:
- Marriage or divorce
- The birth or adoption of children or grandchildren
- The death of a beneficiary or trustee
- Significant changes in assets
- Moving to another state
- Changes in personal wishes
A periodic review can help ensure your trust continues to align with your current intentions.
Financial Power Of Attorney
A financial power of attorney allows you to designate someone to manage certain financial matters on your behalf if you become unable to do so yourself.
Depending on how the document is drafted, that individual may have authority to:
- Pay bills
- Manage bank accounts
- Handle investment-related transactions
- Oversee certain property matters
- Conduct other financial activities permitted by the document
Because this individual may have significant responsibilities, it may be appropriate to periodically review whether your chosen representative and any successor representatives continue to reflect your preferences.
Healthcare Power Of Attorney
A healthcare power of attorney allows you to appoint someone to make healthcare decisions on your behalf if you are unable to communicate your own wishes.
Selecting someone who understands your values and preferences can be an important part of the planning process. As family circumstances change, some individuals choose to review whether the person named in this document continues to be the appropriate choice.
Living Will Or Advance Healthcare Directive
A living will, sometimes referred to as an advance healthcare directive, communicates your preferences regarding certain medical treatments and end-of-life care.
These documents can help provide guidance to family members and healthcare providers during difficult situations. Because personal preferences and medical circumstances may change over time, reviewing these documents periodically may help ensure they continue to reflect your wishes.
Beneficiary Designations
Some assets are transferred through beneficiary designations rather than through a will.
Examples may include:
- Retirement accounts
- Life insurance policies
- Certain annuities
- Transfer-on-death or payable-on-death accounts
Because beneficiary designations often override instructions contained in a will, reviewing them periodically is an important part of many estate plans.
Reviewing beneficiary designations at the same time you review your estate planning documents may help ensure these important pieces of your overall plan continue to work together as intended.
If you have not already done so, you may also find it helpful to read our article, When Should You Review Your Beneficiary Designations?, which explores this topic in greater detail.
When Is A Good Time To Review Estate Planning Documents?
There is no single schedule that applies to everyone. However, many individuals choose to review their estate planning documents after significant life events or as part of a periodic financial planning review.
Examples include:
- Marriage or divorce
- Birth or adoption of a child or grandchild
- Retirement
- Significant changes in assets
- Death of a spouse, beneficiary, or decision-maker
- Moving to another state
- Changes in tax laws or estate planning laws
Even if none of these events have occurred, periodically reviewing your estate planning documents may help confirm they continue to reflect your wishes and current circumstances.
Estate Planning And Financial Planning Often Work Together
Estate planning involves more than preparing legal documents. It often connects with retirement planning, beneficiary designations, tax planning, charitable giving, and legacy planning.
Periodically reviewing these areas together may help ensure your financial plan continues to align with your personal goals, family circumstances, and long-term objectives.
Because estate planning documents are legal documents, any updates should be discussed with a qualified estate planning attorney.
How Advisors Management Group Can Help
Estate planning is one component of a comprehensive financial plan. While Advisors Management Group does not prepare legal estate planning documents, our financial planning team can work with clients to review how estate planning considerations fit alongside retirement planning, beneficiary designations, investment management, tax planning, charitable giving, and legacy planning.
When appropriate, we also collaborate with clients’ attorneys, accountants, and other professionals to help ensure financial planning decisions support their broader long-term objectives.
Contact Advisors Management Group
If you would like to discuss your financial goals, review your current financial plan, or learn more about Advisors Management Group’s financial planning services, please contact us.
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