As we wrap up estate plan document signings, there is often a sigh of relief from clients who say, “I’m so glad that is taken care of!” But before you check off your to-do list, there are a few steps you should take to ensure that your estate plan is ready for future action.
1. Have meaningful conversations with all fiduciaries listed in your documents.
The person or people you named to serve in various fiduciary roles like Power of Attorney, Health Care Proxy, Trustee, and Personal Representative should know about and understand the capacity in which they have been asked to serve. As they are all positions with wide authority and broad decision-making ability, those individuals should also understand your wishes with respect to that role. Understanding their role and your wishes sets them up for success when making important decisions on your behalf.
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2. Let your fiduciaries know where to find original documents.
At some point, one or more of the individuals you appointed to act on your behalf may be called upon to perform their designated functions. In that case, they will need to provide the original copy of the document that gives them authority to a third party such as a bank, hospital, or court. It will save time and frustration if that person knows exactly where to find the original document. Original documents should be stored in a safe and accessible location such as your attorney’s office or a fireproof and waterproof box in your home. Make sure to inform your fiduciaries of the location of such documents and how to access them (e.g., by providing contact information for your attorney or the combination of a lockbox).
3. Destroy all unsigned and outdated documents.
To avoid confusion and the discovery of potentially conflicting documents in the future, take time to destroy unsigned drafts and outdated copies—both originals and duplicates. Only keep copies of your current documents. It may be helpful to keep a note regarding where the original documents are stored along with any duplicates (see #2 above).
4. Fund trusts and confirm beneficiary designations, as applicable.
If a living trust is part of your estate plan, it is important to ensure that the trust is fully funded with assets. An unfunded or partially funded trust will not help your estate avoid the probate process after your death. You will make ownership changes to transfer the title of most of your assets such as your home, bank accounts, and personal property from your name individually to your name as trustee of the trust. For other assets, such as life insurance and retirement accounts, you will make beneficiary changes to properly distribute those assets. Even if a trust is not part of your current estate plan, now is a good time to confirm that beneficiary designations for all your accounts are consistent with your wishes and make updates as needed.
Moving forward, be sure to review your documents regularly to ensure they reflect your current wishes and account for major life events, such as births, deaths, marriages, job changes, home purchases, or anything else that could affect your planning.
