Five Steps to an Updated Estate Plan

By: Frank Stepp
Senior Vice President
Thompson & Associates
April 2012

Benjamin Franklin, in a letter to Jean-Baptiste Leroy in 1789 said "In this world nothing can be said to be certain, except death and taxes." Even so, over 75% of Americans do not have an updated Will. There are many reasons but most of the time it comes down to time and understanding.

A Will is an instrument that deals with the end of our life. While I have no choice about completing my tax return for the IRS each year, I do have a choice when it comes to creating, reviewing or updating my Will. So, it's easy to forget about it or at least put it off indefinitely.

If you are one of the 75% who do not have a Will or if it has been a few years since you had it reviewed, please consider these five easy steps to creating or updating your Will.

  1. Locate your current Will and Power of Attorneys. You should have a Durable Power of Attorney (otherwise known as a General Power of Attorney) and a Healthcare Power of Attorney. A Durable POA makes it possible for your Power of Attorney to handle your financial affairs, in the event that you are incapacitated. While we never anticipate being unable to handle our own finances, circumstances can arise that cause us to need assistance.

You might be out of the country and need someone to check on an erroneous charge on your credit card. Financial agencies are prohibited from revealing information about your accounts to anyone except you or those who hold Power of Attorney on your behalf.

The Healthcare POA was made necessary by the passage of the health information portability and accountability act (HIPAA) to ensure your privacy. Your physician and other medical personnel are prohibited by law from releasing any medical information to anyone NOT authorized by you. In the event you cannot speak for yourself, your Healthcare POA will be able to receive healthcare information and even make medical decisions for your treatment, if you give them that right.

  1. Decide if any changes in your life have taken place since your original Will was drafted or since you last updated it. For example: Are you nearing the age 70 1/2? Have there been any changes in your family? Are heirs mentioned still living? Have there been any divorces? Have your assets changed? Do you own additional assets not mentioned in your Will? Have you moved from one state to another? Have there been any changes in the tax laws since your current Will was drafted?

It's a reasonable guess that you have to answer "Yes" to at least one of the above. The estate tax laws alone have been a moving target since 2009. It is possible that your estate will not pass in the manner you desire, based on some of these changes.

  1. Meet with a professional to discuss your options. This may be your attorney but it may also be a CPA, a financial professional and/or a professional estate planner.

The reason most people give for not meeting with an attorney to review their plan is the cost. Do not let cost be the sole factor in your decision. It's sad to think that most people will easily pay more for a set of new 20" radials for their car or truck than they will pay to an attorney to review their estate plan.

Other options are available to you as well. A professional trained in estate planning may be a good starting point for you. They will be able to educate you on your options, based upon the changing estate tax laws. The nonprofit organization that has provided this article can recommend a professional estate planner that sells no products.

  1. After meeting with your professionals it's time to have the new documents drafted. This should ONLY be done by a local attorney. While your out-of-state attorney may have served you well in the past, it is best to have a local attorney, familiar with your State's laws, draft your new documents.

People often are tempted by online sites that offer Will kits. The lure of having a drafted estate plan for only a few hundred dollars is sometimes very tempting but this is seldom a good option. A local attorney is familiar with all state and federal laws. He or she is available for questions later on, and upon your death, your heirs will most likely need to seek out an attorney to assist them with the process of probating the Will. By using a local attorney, your heirs will already have someone they can trust to settle your estate.

  1. Finally, put a copy of your estate plan in a safe place that will be easy to find when the time comes. You should create a "When I'm Gone" file and let your heirs know where the file is located.

This file can contain information such as: (the location of the original Will(s), life insurance policies, credit card account numbers and phone numbers to cancel).How many stories have we heard about the family not knowing where the safety deposit box was located or where the key was? You can make the job of the executor a lot easier by just providing them with a "When I'm Gone" file.

A Will just might be the most important legal document you'll ever sign. It protects your most important assets--your family. Without one, the courts--and not you--decide what happens to your assets. They can even decide what happens to your children.

The old saying that the best way to eat an elephant is "one bite at a time" applies here as well. The task of creating or updating a Will is not so daunting when you look at it as Five Easy Steps.

Please take time to pull your old Will out and review it. You may be surprised what you find.


Frank Stepp, PMP, ARM, joined Thompson & Associates in 2005 with over 25 years of experience in finance and nonprofit organizations. He has played a key role in the Thompson & Associates website development and integrating new processes and technology into the training process. He currently serves as Senior Vice President with clients in Texas, Colorado, New Mexico, Indiana, Florida and Arkansas.





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