Spring Cleaning Your Estate Plan

March 20, 2019

March 20th, 2019 marks the star-studded first day of spring in the Northern Hemisphere. There are numerous ways to celebrate this astronomical event such as taking a walk, planting a garden, watching NCAA basketball March Madness, or, our favorite – spring cleaning. Spring cleaning means to spruce up and organize your home and personal items; the same can be applied to your estate plan.

Like the items that accumulate in our homes, estate plans can also rack up items that may not be important to you anymore. In our 20’s, 30’s, 40’s, etc., we lived lives that were much different to the lives we live now. Couples marry and divorce, children are born, family members pass away, domiciles change, and assets may be gained or lost. Every 10 years or so, we recommend spring cleaning these important documents to reflect your important life changes:

  • Update your Power of Attorney.

The most desirous Power of Attorney to have is the Durable Power of Attorney. It allows you (the “principal”) to select a person (the “agent”) to “step into your shoes” if you become mentally or physically incapacitated. This document goes into effect the minute you sign it. If you have a Power of Attorney created prior to October 1st 2011, then you should update it, as new laws went into effect that month.

The 2011 Florida Power of Attorney Act now requires that any “superpowers” such as the power to gift money, apply for government benefits, access a safe deposit box or vault, access digital assets, and so much more, must be distinguished in the document and must be initialed by the creator.

  • Creating Amendments to your Living Trust.

As a reminder, a “Living Trust,” also known as a “Revocable Trust” is a primary estate-planning document that is used in place of a Last Will and Testament (“Will”). Assets are then transferred into the Trust. Trusts are used to by-pass probate, which means that upon your death, all assets in the Trust pass to the beneficiaries through the Trust, and not through any court process. Trusts can provide your beneficiaries with asset protection. Upon inheriting any monies or assets through a Trust, the beneficiary enjoys financial protection from future creditors, divorces, and bankruptcy.

One important feature of a Trust is that it is fully revocable. The creator can change any terms or completely revoke (cancel) the Trust. Amendments allow you to edit any section of your Revocable Trust. For example, if you had designated your sibling to be an assigned beneficiary and now wish to designate your niece or nephew, then an amendment would be created, stating your sibling will be removed and your niece or nephew would be added. Generally, you would see language such as “Article Three will be amended as follows…” Amendments should also be applied when there are any life changes and could affect your Trust.

  • Update your Family Wealth Inventory.

A family wealth inventory is a document that lists your assets, or anything of value, that applies to your estate plan. Similar to life’s changes, your assets also change over the years. Or, financial institutions merge, buy each other out, or change names. It is crucial to keep up to date on these changes, so that in case of sudden death, your family members do not have to go scrambling to find your accounts during the mourning period. A family wealth inventory is just what it sounds like. A document or folder that is located at an obvious location that your family can access. This can be a formal document, an excel spreadsheet, or as we recommend, a binder containing a statement from every active account that you are listed on with the contact information of the person handling that account (such as a financial advisor, bank manager, etc.).

Is it Time to Update your Estate Plan? A Checklist:

  • Since creating your estate plan, have you been married or divorced?
  • Has the Personal Representative listed on your Will or any of your beneficiaries died, or has your relationship with them changed?
  • Do you have any new grandchildren?
  • Have your children moved out of state?
  • Have you bought and sold real estate, or opened or closed a business?
  • Have you moved to another state?
  • Have you gained or lost any major assets?
  • Have your state or federal tax laws changed in any way that may affect your wallet?

If you’ve answered yes to any of these questions, it is time to update your estate plan. Contact OC Estate and Elder Law at (954) 251-0332 or info@ocestatelawyers.com to get started. Our attorneys are fluent in English, Spanish, and Russian.