Q: Do you have any New Year's suggestions?
A: This is a good time to develop the habit of annually looking at your estate matters.
Review your Will, Durable Powers of Attorney, and Living Will, even if you have recently done so. People always express to me surprise at what they find when they do take the few minutes to do so.
If you do not understand something, or provisions in your Will do not reflect what you thought you had, go back to the attorney to straighten things out. Often as many as half of the Wills I review, which other attorneys have done, simply do not reflect what the client intended.
Unless you only have one child, or you can guarantee that all of your children will survive you, take the children's names off all assets, with the possible exception of a checking account (and that is to insure that bills can be paid without interruption.
Far too often a child predeceases, thereby cutting off the deceased's descendants from inheriting, or a child gets into financial problems, or suffers through a divorce, or a child forces the sale of an asset. Also the beneficiaries lose out on the income tax benefits, such as a complete step up in the capital gain tax basis.
Do not make a child into your own personal saint by leaving everything to him or her, with the understanding the certain things will be done. Even if that person withstands internal temptations as well as outside pressures, that person can only distribute $10,000 of value per person each year without suffering personal gift tax problems.
Double check that if you have a safety deposit box that you have added another name to the signature card. That way the box will not be locked up if we lose you. Also review beneficiary designations on all documents, even if you have recently done so.
Adjust your asset list (or do one) to be certain that your personal representative will have as easy a time as possible. Additionally, be sure that the location of important documents such as stocks, deeds, insurance policies, etc. is disclosed to your personal representative.
If you are one of those people who decided to go ahead and do a living trust, then you probably have to stay with it, but make sure that ALL assets are transferred to the living trust, that you still have a Will, and do not let any lawyer talk you out of the need for Durable Powers of Attorney.
Realistically review the prospect of having to go to a nursing home. If that may be the case in the next year or so, then see your attorney, even if you feel you are protected with a living trust (which probably is not the case). But even if you are not in the best of health, do not do the asset transfers, changing of the Wills between spouses, setting up elder law type trusts, etc. too soon. Go back, dig out, and reread one of my old elder law planning columns to refresh your memory as to the reasons not to jump the gun too soon.
Finally, do not be frustrated that you cannot do things once and then forget about them. The "estate plan" is supposed to reflect your wishes and also make things easier for your personal representative. Thus as things change in life, your plan needs to be fine-tuned. Get into the habit each year of doing it.