The Importance of Financial “Spring Cleaning”

How an Estate Plan will prepare you and your family for the future

March 20, 2021 marked the official start to the Spring season. For many, the arrival of warmer weather and longer days signals a time to tidy up your home and surroundings.  This year, as you sweep away the dust bunnies, you may want to consider engaging in a different kind of spring cleaning, one that does not require a vacuum or a broom, but one that is equally as important: financial spring cleaning.

Your estate plan, like your home, requires periodic up-keep. In these everchanging and unpredictable times, it is more important than ever to ensure that you have an estate plan in place and that it meets your current goals and needs. Here are some things to consider when deciding whether it is time for a “spring cleaning” of your estate plan:

Do you have an estate plan in place?

  • A survey conducted by AARP estimates that roughly 60% of Americans do not have an estate plan in place[1]. One of the main reasons given by respondents for their lack of plan is that they do not have enough assets to leave anyone.

Estate planning is not limited to the wealthy. Individuals of every age and financial background will benefit from having an estate plan in place. Even the most basic estate plan will ensure that your wishes regarding your finances and healthcare are properly documented and will provide a sense of direction, efficiency and order to your loved ones upon your death or incapacity.

Our firm will tailor your estate planning documents to your current needs.

If you do have an estate plan in place, how long has it been since your estate planning documents were created? 

  • It is recommended that you revisit your estate documents at least every five years (or sooner depending on any intervening life events).

Are the individuals that you chose to fulfill roles such as Executor, Trustee, Guardian, and/or Power of Attorney up to date?

  • The individuals that you name in these roles play a crucial part in making decisions for you in the event of your incapacity or death and are responsible for carrying out your estate plan. Given this responsibility, it is important that you revisit these nominations periodically to ensure that you remain confident in your selection and that the person selected is willing and able to serve in this capacity.

Have there been changes to your family or other persons named in your estate planning documents?

  • Some examples include illness, relocation, marriage, divorce, death, and the birth of children and/or grandchildren. These changes could impact your estate plan.

Have your assets significantly changed?

  • Have you recently experienced a substantial increase/decrease in wealth, established/sold a business or received an inheritance? These circumstances, among others, may warrant a change to your estate plan and tax planning strategies.

Are your beneficiary designations current and/or do your beneficiary designations align with your estate plan?

  • Many assets these days, including retirement accounts, life insurance policies, and certain bank/investment accounts, will pass to the named beneficiaries on file with the respective financial institutions. Therefore, it is important to ensure that you have current beneficiary designations on file for your accounts and that the beneficiary designations match your estate plan goals.

If any of the above circumstances apply to you, do not sweep this task under the rug. Completing a review of your estate plan now will allow you to move into the summer months with peace of mind knowing that your estate plan is in order.  

If you would like to discuss your existing plan or establish a new plan, please contact our office at (401) 455-3500 to speak with one of our experienced estate planning attorneys.

Please note that our firm is mindful of the ongoing COVID-19 pandemic and have implemented procedures to minimize contact and exposure to ensure the safety and well-being of our clients.

 

[1] https://www.aarp.org/money/investing/info-2017/half-of-adults-do-not-have-wills.html.

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 Phone: 401-455-3500 | Fax: 401-455-0648