Life does not always go according to plan.
Years ago, my husband planned a surprise vacation for our family. He kept the itinerary secret, which was unsettling for me because I am a planner. I didn’t know where we were going, what the weather would be like, or what activities we would be doing.
So I prepared for several possibilities.
I packed clothes for both warm and cool weather, along with a swimsuit and a jacket. I didn’t use everything I brought, but I was glad I had what I needed as our trip took us through very different climates and activities.
Estate planning works in much the same way.
We cannot predict exactly what will happen in the future. We do not know whether we will remain healthy, whether the people we have named to act for us will always be available, or whether our families and finances will look the same several years from now.
That uncertainty is exactly why a thoughtful estate plan includes provisions that may never be needed.
The goal is not to predict every possible event. It is to prepare your family to handle the unexpected if it occurs.
Estate Planning Is About More Than What Happens When You Die
Many people think of estate planning primarily as deciding who will inherit their property after death.
That is certainly an important part of the process, but a comprehensive estate plan should also address what happens if you are alive but unable to manage your own affairs.
An unexpected accident or illness could leave you temporarily or permanently unable to make financial or healthcare decisions. Without appropriate planning, your family may have to seek court authority before someone can manage your finances or make certain decisions for you.
A good estate plan therefore prepares for both incapacity during your lifetime and the administration and distribution of your estate after your death.
Review Your Will and Trusts
Your Will and any trusts you have created should reflect your current family, assets, and wishes.
Review the people and organizations you have named as beneficiaries. Ask yourself whether you still want your property distributed in the same way.
Consider whether:
- New children or grandchildren should be included;
- A beneficiary has died;
- A beneficiary’s circumstances have changed;
- You have married or divorced;
- One of your children has married or divorced;
- Your financial circumstances have changed substantially; or
- You have changed your mind about who should receive particular property.
You should also review the people you have selected to administer the plan.
Is the person you named as Executor still the person you trust to settle your estate? Is your trustee still willing and able to serve? Are your alternate choices still appropriate?
A person who was an excellent choice ten years ago may no longer be the best choice today.
Do Not Overlook the “What If” Provisions
Clients sometimes ask why their Wills or trusts contain provisions addressing circumstances that do not currently apply to them.
For example, your trust may explain how a trustee can resign and how a successor trustee should be appointed even though your current trustee is healthy and willing to serve. Your Will may contain trusts for minor descendants even though your own children are responsible adults.
Those provisions are there because circumstances can change.
Imagine that you leave property outright to an adult child, but that child unexpectedly dies before you and leaves minor children. A carefully drafted estate plan can address what happens next without requiring you to have anticipated that precise event.
Contingent beneficiaries, successor fiduciaries, and trusts for younger beneficiaries are not unnecessary boilerplate. They are part of planning for circumstances you cannot foresee.
Reevaluate Guardians for Minor Children
If you have minor children, one of the most important things you can do in your Will is name the people you would want to serve as guardians if both parents were unable to care for them.
Review that choice periodically and ask yourself whether the people you named are still the best choice.
Since you created your Will:
- The proposed guardian may have moved;
- Their health may have changed;
- Their family circumstances may be different;
- Your relationship with them may have changed; or
- Another person may now be a better fit for your children.
You should also name at least one alternate guardian in case your first choice cannot serve.
And if you have not already done so, talk to the people you have selected. They should know that you are considering them for this responsibility and have an opportunity to tell you whether they are willing to accept it.
Review Your Financial Power of Attorney
A financial or durable power of attorney authorizes someone you trust to handle financial and legal matters on your behalf under the circumstances described in the document.
This can become especially important if an injury or illness prevents you from managing your finances yourself.
Your agent may need to deal with banks, investments, bills, insurance, taxes, real estate, or other financial matters. Review the person you selected and any alternates. Consider whether your agent is still:
- Someone you trust completely;
- Financially responsible;
- Available when needed;
- Capable of keeping good records; and
- Willing to communicate with your family and advisors when appropriate.
If your circumstances have changed significantly since you signed the document, it may also be worth reviewing the authority granted to your agent.
Review Your Healthcare Documents
Your estate plan should also address who can make medical decisions for you if you cannot communicate or make those decisions yourself.
Your agent should understand your values and be willing to make difficult decisions if necessary. Review your healthcare or medical power of attorney and make sure the person you named is still the person you want speaking for you.
You should also review any advance directive or living will addressing your wishes regarding end-of-life treatment.
Documents cannot anticipate every medical circumstance. Conversations matter too. Make sure the people likely to be involved understand your general preferences and know where your healthcare documents can be found.
Check Your Beneficiary Designations
Not everything you own will necessarily pass according to your Will or trust.
Assets such as retirement accounts and life insurance commonly pass according to beneficiary designations on file with the financial institution or insurance company.
Review beneficiary designations on:
- 401(k)s and other employer retirement plans;
- IRAs;
- Life insurance policies;
- Annuities;
- Payable-on-death accounts;
- Transfer-on-death accounts; and
- Other accounts or assets with contractual beneficiary designations.
Make sure both your primary and contingent beneficiaries are current.
This is particularly important after marriage, divorce, a death in the family, or the birth or adoption of a child.
Beneficiary designations should also be coordinated with the rest of your estate plan. Changing your Will does not necessarily change the beneficiary designation on a retirement account or insurance policy.
Review How Your Assets Are Titled
Asset ownership matters just as much as the language in your estate planning documents.
Property may be owned individually, jointly, with rights of survivorship, through a trust, or through a business entity. Each form of ownership can affect how the property passes at death.
If you have created a revocable living trust, review whether the assets that should be owned by the trust were actually transferred to it.
A beautifully drafted trust cannot avoid probate for an asset that was supposed to be transferred to the trust but never was.
Similarly, review any survivorship arrangements to make sure they continue to reflect your intentions.
Assess Your Life Insurance
Your life insurance needs may change as your life changes.
A policy purchased when your children were very young may no longer serve the same purpose once they are adults. Conversely, the birth of another child, the purchase of a home, a significant increase in debt, or a change in income may create a need for additional coverage.
Review:
- The amount of coverage;
- The beneficiaries;
- The ownership of the policy;
- Whether premiums are being paid as intended; and
- What financial obligation the policy is intended to address.
The question is not simply whether you own life insurance. It is whether the coverage still fits the needs it was intended to address.
Make Sure Your Family Can Find Your Important Documents
An estate plan is far less useful if no one knows it exists or where to find it.
Make sure the appropriate people know where the originals of your important documents are stored. Those documents may include:
- Your Will;
- Trust agreements;
- Financial powers of attorney;
- Healthcare directives;
- Life insurance information;
- Property deeds;
- Business documents;
- Funeral or disposition instructions; and
- Other important financial and legal records.
You may also want to keep secure digital copies for reference.
You should keep your estate planning documents in a safe place, but don’t make access so difficult that your family cannot locate the documents during an emergency.
At a minimum, your Executor, trustee, agent, or another trusted person should know whom to contact and where the originals are maintained.
Create an Emergency Information List
Your family may need information that does not belong in a Will. Consider maintaining a separate, secure list containing practical information such as:
- Your estate planning attorney’s contact information;
- Your financial advisor and accountant;
- Your insurance agent;
- The financial institutions where you maintain accounts;
- Information about safe deposit boxes;
- Business contacts;
- Information regarding recurring bills and obligations; and
- Instructions for accessing important digital information.
This list can be updated without amending your Will every time an account or contact changes.
Plan for Your Digital Life
Many important assets and records now exist primarily online.
Think about what someone would need to access or manage if you became incapacitated or died. This may include:
- Email accounts;
- Cloud storage;
- Online banking and investment accounts;
- Social media;
- Digital photographs;
- Websites and domain names;
- Cryptocurrency and other digital assets;
- Subscription services; and
- Online businesses or intellectual property.
Do not place passwords directly in your Will, which may eventually become part of a probate record.
Instead, use a secure method of maintaining access information and make sure an appropriate trusted person knows how to locate it.
If You Own a Business, Have a Continuity Plan
Business owners have additional planning concerns.
If you could not work tomorrow, who would have authority to handle urgent business matters? Who would communicate with employees, clients, vendors, landlords, lenders, and business partners?
Your estate plan should coordinate with your company’s governing documents, ownership arrangements, buy-sell agreements, insurance, and succession plan.
A business that depends heavily on one owner can lose value very quickly when that person’s incapacity or death creates uncertainty about who is in charge.
Think About Pets and Other Dependents
Children are not the only family members who may depend on you. If you have pets, consider who should care for them if you are no longer able to do so.
You may want to discuss the responsibility with the proposed caregiver and make financial provisions for the animal’s ongoing care. You should likewise account for any other person who depends on you financially or practically, including an aging parent or a family member with disabilities.
Before You Travel, Do a Quick Estate Planning Check
Vacations often prompt people to think about estate planning because travel temporarily takes us away from the routines and support systems we normally rely on.
You do not need to rewrite your estate plan before every trip.
But before significant travel, especially international travel or a trip away from minor children, it is worth asking a few basic questions:
- Is my Will current?
- Are the guardians I named still appropriate?
- Are my financial and healthcare agents still the people I want?
- Does someone know where my documents are?
- Can the appropriate people reach my attorney or other advisors?
- Are my beneficiary designations current?
- Does the person caring for my children have the practical and medical information they may need?
You may never need any of these preparations while traveling. That is, of course, the outcome everyone hopes for. The value is knowing that your family has a plan if circumstances do not unfold as expected.
Communicate With the People You Have Chosen
Your Executor, trustee, guardian, financial agent, and healthcare agent should not be surprised to discover their roles during a crisis.
You do not necessarily need to share every detail of your estate plan with every family member, but the people you have asked to serve should generally understand:
- That you have named them;
- What their general role would be;
- Where important documents can be found;
- Who your attorney and other advisors are; and
- Who should be contacted if something happens to you.
For healthcare matters and guardianship decisions, conversations about your values and priorities can be especially valuable.
Review Your Estate Plan After Major Life Changes
You should not wait for a vacation to review your estate plan. Other life events should also trigger a review, including:
- Marriage;
- Divorce;
- The birth or adoption of a child;
- The birth of a grandchild;
- The death of a beneficiary or fiduciary;
- A significant change in your assets;
- The purchase or sale of a business;
- Moving to another state;
- Retirement;
- A significant change in a beneficiary’s circumstances; or
- A change in whom you trust to make decisions for you.
Even without a major event, reviewing your estate plan every few years can help identify provisions, appointments, or beneficiary designations that no longer fit.
Do Not Wait Until the Last Minute
People sometimes decide to prepare or update estate planning documents immediately before surgery, a major trip, or another event that suddenly makes planning feel urgent. Planning in situations like this is certainly better than doing nothing, but it can create unnecessary pressure, but estate planning decisions deserve time and careful thought.
You may need to discuss guardian choices with your spouse, speak with the people you want to name as fiduciaries, locate beneficiary information, retitle assets, or coordinate documents with financial accounts.
The better approach is to prepare while life is relatively calm rather than waiting for an emergency.
You Cannot Predict the Future, but You Can Prepare for It
When I packed for that surprise vacation, I did not know exactly what I would need. Some of what I packed went unused. But preparing for several possibilities meant I was ready when the circumstances changed.
The same principle applies to estate planning.
You may never need the provision explaining how to replace a trustee. Your alternate guardian may never serve. Your financial power of attorney may sit unused for decades. The contingent trust for grandchildren may never be created.
That does not make those provisions unnecessary.
Because none of us has a crystal ball, thoughtful estate planning anticipates reasonable possibilities so your family does not have to improvise during an emergency.
Reviewing your plan periodically, keeping your documents accessible, coordinating beneficiary designations, and talking with the people you have chosen can give your family something extremely valuable when the unexpected happens: clarity.
Rania Combs is licensed to practice law in Texas and North Carolina and helps clients create and update estate plans designed for their families, assets, and goals.
Schedule a consultation if you would like to review your estate plan or create one for the first time.
