If you’ve made an estate plan, good for you: you’re ahead of many people in gifting your family (and yourself) with peace of mind. However, keep in mind, estate planning is not a “once and done” project. Life changes, circumstances change, assets change and people change. Here’s a checklist to use when updating your plan every 3-5 years.
Life Events and Routine Shifts Too
It stands to reason that big life events typically necessitate adjustments to estate plans. New baby in the family? Children hitting adulthood? Marriage? Divorce? Business started up or sold off? Real estate purchased? All these are examples of life events that likely require updates to estate plans, ensuring that the details reflected in trusts or wills line up to current actualities. However, it’s not just these “big life moments” that require estate plan updates. Regular realities might necessitate rethinking too. For example, perhaps the executor designated in a will has moved away or simply become too busy to administer your affairs when the time comes. Perhaps the value of assets in your plan has changed for the positive or negative? Perhaps you are beginning to experience some declines in capacity and need to re-think financial decisions so you can budget for help?
As these examples illustrate, twists and turns are part of life. Accordingly, estate planning experts advise that it’s best practice to review your estate plan every three to five years and offer this checklist as a reference for doing so:
✓ Review all fiduciary roles
✓ Review asset titling and beneficiary designations
✓ Consider liability protection for real estate
✓ Plan whether your adult children need their own estate plans
✓ Consider taking further estate tax mitigation steps
✓ Pre-plan your funeral
✓ Compile and secure your most important records
Fiduciary Roles?
In many ways, the success of estate plans rests on the shoulders of the fiduciaries designated to see them through. Location, circumstance and the details of estate plans determine the specific fiduciaries named in an estate plan, such as executor, personal representative, trustee, guardian and conservator. Regardless of the nomenclature, all fiduciaries have a legal responsibility to put the affairs of the estate and its beneficiaries ahead of personal interests. Fiduciaries are held to high standards, encompassing the duties of loyalty, care, good faith, confidentiality and prudence. In other words, serving as a fiduciary is not an honorary role, and even with diligent estate planning and detailed, preparatory communications, fiduciaries tend to find themselves with lots to do. That’s why: “A great first step in reviewing your estate plan is to look over the individuals you have selected for various fiduciary roles. This includes successor trustees under your trust(s), personal representatives under your will, agents under your healthcare and financial durable power of attorney documents, and guardians for minor (or special needs) children, if applicable. Consider whether you still have the right people in each of these roles.”
Remember, being too busy to serve as a fiduciary is not a reflection of love: a daughter actively parenting young children and running a business may realistically be unable to effectively serve as a fiduciary. When reviewing and designating fiduciaries, keep in mind that although it’s common to appoint close relations, there are no laws requiring this. Additionally, while it may be tempting to name multiple individuals to each fiduciary role, doing so often just adds to the challenges for everyone involved. For example, in a family with three adult children, appointing all three as trustees, can lead to delays every time documents or accounts need attention. Sometimes, appointing a professional fiduciary makes good sense, and can relieve relations and friends from excess worry and stress. Ultimately, regardless of who is appointed to fiduciary roles, it’s best to add back-up fiduciaries, who are prepared to step into action should they be needed. Accidents, career responsibilities, parental duties and illnesses are all examples of disruptions that can impact the lives of fiduciaries–and make successor fiduciaries helpful.
Given the significant, legally binding responsibilities of fiduciaries, a type of bond, often referred to as a fiduciary bond is frequently required. Depending on the specific responsibilities to be undertaken, the bond may alternatively be referred to as a conservator, guardian, trustee, personal representative, executor or estate bond. The essential purpose of every type of fiduciary bond is to serve as a guarantee that duties will be carried out in accordance with the law, and in the best interests of beneficiaries. Colonial Surety makes it easy and speedy for fiduciaries in every state of the country to obtain their bonds. To quickly obtain fiduciary bonds with Colonial’s digital service, simply: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere.
Obtain Digital Fiduciary Bonds HERE
Estate Planning Attorney?
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Probate attorneys can help clients secure court and fiduciary bonds with a few clicks on The Partnership Account® for Attorneys. Just select the bond needed, send it to your client for payment, and then download, e-file or print the bond.
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Colonial Surety is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA. Our customers have awarded us a 4.8 Trustpilot score.Whenever and wherever you need a bond, trust Colonial: www.colonialsurety.com