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DOES YOUR ESTATE PLAN STILL SPARK JOY?

The world feels chaotic right now. The news is changing by the minute. Measures once thought impossible are happening daily—schools are closed for the remainder of the academic year, most Americans have been advised to stay at home, Disneyland—DISNEYLAND—is closed, for only the third time in history!

Some people, myself included, have used this time to organize. I cleaned out my pantry, my junk drawer and family room cabinet. These are small things, but they helped me feel like I was accomplishing something. Moreover, it was beneficial to focus on something I can control rather than worrying about things I can’t change.

I would recommend you use this energy to take stock of any estate planning you have done, whether it be a Will or a Trust and your Advance Health Care Directive.

If you are like most people that have done planning, you met with the attorney, signed the documents and then put them on a shelf or in a drawer, knowing you did the right thing by planning for your death. Not that this is bad. It is actually kind of the point. Thinking about what would happen to your family and your assets when you die is hard. You signed your Will or your Trust and you got the peace of mind that that provides.

But things change. Life continues to evolve. Now is your opportunity to take out that estate planning binder or file and look at it again. Think about the following:

  • Your trust is only as good as the assets that are funded into it. Are your real property, your bank accounts, and your brokerage accounts titled in the name of the trust? Some clients mistakenly believe that the funding was all taken care of by the attorney. This is most likely not the case. Accounts that are over a certain dollar figure (right now in California that figure is $166,250) will likely have to be probated if they are not in the name of your trust.
  • Look at the beneficiaries on your life insurance policies. Make sure you have not named a minor as the beneficiary. If a minor inherits the proceeds of the policy, a guardian will have to be appointed by the court to manage the money on the minor’s behalf. This is true even if the minor has a living parent. Confirm that the beneficiary is who you would want to receive the proceeds if you died now—not a former spouse or an old friend you don’t see anymore.
  • Beginning in January of 2020, there have been changes to the way inherited retirement accounts are distributed to beneficiaries. This may impact the way the distribution of your retirement account factors into your overall estate planning strategy. Consider talking to your estate planning attorney and tax advisor to ensure your plan will work the way you want it to under the current rules.
  • Review your Advance Health Directive and make sure it reflects your current wishes. Is your named agent still the person you want making your health care decisions if you can’t do it? Have your end-of-life instructions changed? Are there additional things you would like to communicate to your agent?

It is important to note that the Probate Courts are closed right now for all but the most urgent matters. This means that when they reopen, a system that was already slow will have to catch up and address all new cases. Your best strategy to avoid court is to validate that your estate is up to date and complete.

Take this time to polish up your estate planning documents. In these uncertain times, it is an essential way we can regain some control.