Rhonda Maco, ESQ.
WHAT’S YOUR STATUS?
When it comes to estate matters, I always tell clients to perform what I call a ‘life check’. What’s a ‘life check’? It’s similar to a spring cleaning or a health check that everyone performs or should perform periodically. For example, you Spring clean once a year; you probably change the batteries in the smoke detectors with the change of a season or at a minimum twice each year; you should have your primary physician perform an annual physical on you to ensure that your health is not deteriorating; and if you’re over a certain age, you should proceed with certain testing such as a colonoscopy or mammogram.
Well, add ‘life check’ to the list of yearly ‘check-ups’ you should perform. You should review your life estate documents at least once a year or whenever you have a significant life event or change in your family dynamic. What do I mean by that? Well, let’s start with a few questions you can ask yourself?
1. Did I recently get married or divorced?
2. Did I have another child since my Will was drafted?
3. Has the number of grandchildren I have increased?
4. Has there been a change in my health status?
5. Who are the current beneficiaries of my insurance policies, 401k, pension, etc.?
6. Has there been any deaths in the family?
Now, believe me, the list of questions can go on and on, but if you answered ‘Yes’ to these six (6) questions, you may need to make changes to your life estate documents. I can tackle each one of these questions and write extensively on what different considerations each ‘yes’ answer poses to the future of your estate. But the point is to get you into the habit of checking on these documents ever so often to make sure your estate is protected in the way you intended it to be protected for the well-being of your beneficiaries. There is nothing worse than falsely believing that you’ve planned out your estate perfectly and it turns out that the estate is distressed almost immediately after you’re gone. Guess what? You certainly cannot come back to correct the mistakes you made. And the people you left behind may have to fight one another in the very manner you sought to avoid. And as if that wasn’t enough, what if the tax consequences are devastating for your estate because you failed to change the Will to address certain assets that you attained while you were living?
How do you avoid these potential problems? Perform a ‘life check’ on yourself. Start by writing out a list of all the assets you own. Include all real property including investment properties, personal property, bank accounts, including checking, savings, investment accounts and any accounts in your name. If you have any joint accounts include them on the list and make notations of which accounts are joint accounts. Make three columns to show the original status and the changes in those assets similar to this:
ASSETS TYPE OF ASSET STATUS CHANGE OF ASSET
1. Home Real Property Sold on 1/15/19
2. Savings Acct. Personal Property Closed on 2/2/19
If you have trouble identifying your assets or even categorizing your assets, contact your attorney or estate planner for assistance. Once you have the list together, look over your estate documents to see if these assets are accounted for in these documents. If not, contact your attorney to find out what you should do. Understand that a change in assets can have a major affect on the value of your estate along with any tax consequences. In addition, such changes can affect your beneficiaries. Do yourself a favor, make it a habit to perform a ‘life check’ each year to see how you’re growing each year! Yes, you should be growing every year! You’ll be glad you made this change, and you’ll better position yourself to properly plan for yourself and your prosperity.
Stay engaged with our BLOG for more updates and tips on how to incorporate changes into your life that will protect you and your family. Remember, our BLOG comes out on the 15th of every month. Stay tuned!