Many people think that signing their Will or Revocable Trust is the last step in executing their estate plan. Often, there are additional actions that need to be taken to complete the plan.
- Are your beneficiary designations updated?
Your insurance policies, retirement accounts, bank accounts, and brokerage accounts pass to the people or trusts identified in the beneficiary designation for the account. Without a beneficiary designation, the account details will control who receives the account upon your death.
To ensure that the plan you executed is fulfilled, you need to ensure that the beneficiary designations reflect the distribution in your Will or Revocable Trust. Contact your insurance company, retirement account custodian, bank, and Brokerage Company to obtain a change of beneficiary form. Consult your estate planning attorney or the letter that came with your estate planning documents to provide you with the correct language to use on the beneficiary designation. Once you complete the form, mail or fax it to the address listed on the form, or return it to your financial advisor or Human Resources department at work.
- Did you update your business ownership documents?
If you are a member of an LLC, a partner in a partnership, or a shareholder in a closely-held corporation, you need to ensure that the ownership records of the business entity are updated to reflect a transfer of your business interest to your Revocable Trust. This may require the execution of an amendment to the LLC Operating Agreement, an amendment to the Partnership Agreement, and the issuance of a stock certificate reflecting your Revocable Trust as the shareholder. In addition, some business entities require notice to the manager or the prior approval of a transfer to a new member by the manager. If notice or approval is required, make sure that you provide a copy of the document transferring your personal ownership to your Revocable Trust to the appropriate person within the business.
- Did you tell someone (other than your spouse or significant other) where your documents are located?
Most estate planning clients will receive a binder or copies of their documents after their signing meeting. Make sure that you have informed a trusted person where the binder or documents are located so if you have a medical emergency, become incapacitated, or pass away, your trusted individual can locate the documents that your agents, Personal Representative, or Trustee will need to make sure your intentions are fulfilled. You want to ensure that the time you put into considering all of the details of your estate plan are carried out when needed.
- Have you discussed the appointment of your agents, Personal Representatives, and Trustees (your fiduciaries) with them?
While we always recommend that you discuss these roles with your fiduciaries before you execute your estate planning documents, letting them know that your estate planning is complete is important. During this conversation, it is also a good time to remind them of the role they have in carrying out your wishes upon your incapacity or death. If you are unclear about their role, contact your advisors or our office for more information.
- Have you written a letter expressing your intentions and values that guided your decisions?
Passing on your “things” is often seen as the most important part of estate planning; however, an often-overlooked part of the estate plan is passing on your outlook and viewpoints that have guided your life and your decisions regarding how your “things” are divided. Take this time to reflect on what values, experiences, and advice you consider the most important to pass on to the next generation. If you are benefiting charities, explain what those charities mean to you and why you feel it is an important action. This reflection adds a personal piece to what feels to some people like a pile of “legalese” and may actually be the most valuable thing you leave your loved ones.
- Consider sharing your estate plan with your beneficiaries.
We often believe that our beneficiaries will not have to worry about our estate plan until after we pass away. However, that is a stressful, grief-filled time for most people. Sharing your estate plan now gives you the opportunity to speak about your wishes and choices. You can provide as much or as little information about the plan as you want. For example, some clients discuss the overall structure of their estate planning, but do not share their financial details. You could also hold a family meeting to share the information with everyone at once. Last, you can utilize technology to hold this meeting via FaceTime, Skype, or a simple conference call with your beneficiaries who are out of town.
You have invested a lot of time and thought into getting your estate planning documents prepared and your affairs in order. Don’t comprise all that effort by failing to see the process through and completing some or all of the things listed above.
