It’s tax season. The time of the year when you generally have all your important financial statements in one place. This is a good time to review your estate plan to make sure you are headed in the right direction, or to implement one if you haven’t yet.
Key Areas on Which to Focus
Your estate plan often contains many different components and can seem daunting to review the entire thing. Reviewing your estate plan may be a chore that gets old quickly, especially if you anticipate heeding expert advice and reviewing your plan every three years.
So what can you do to make the reviewing process easier on yourself? You can start by picking a few crucial aspects to focus on.
Crucial components of estate plans
Experts suggest making things as streamlined as possible by focusing on key components, key figures and key financial information. For example, the key components in many estate plans are your trust and will. Your will dictates what happens after your death. Your trust provides assets to beneficiaries. You can determine how much each person gets and when they get those assets.
Key figures
Your key figures include your beneficiaries. These people will receive assets from your trust, shared banking accounts, life insurance policies and more. Thus, you want to ensure your designated beneficiaries are up to date, and reflect the people in your life. It’s important to remove anyone you need to, and to add new beneficiaries as your life path evolves.
Other key figures include those who you designate as your health care proxy and your power of attorney. They handle matters in times of incapacity (like an accident and/or your end of life stages) if you cannot take care of them yourself. This includes matters related to your healthcare and finances. Thus, it is crucial for you to trust these people with your future, and to make sure they know their roles, and your wished.
Focus on finances
Finally, always review finances if you face major life changes. Opening or closing businesses, new children, changes in marital or partner status; these all may affect your estate planning. These also include both net gain and loss situations, like coming into money or falling into debt. You also want to focus on reviewing any assets that take a new form, such as when you sell property.
By narrowing your focus to these areas, you can review your plan in an easier way.
