Issues to Consider When Reviewing Estate Planning Documents

June 15, 2023

Estate planning is a critical aspect of the financial planning process. Reviewing estate planning documents is an important exercise, but it can be a daunting task that many consider tedious and even confusing at times. To help you in this review process, we created the following checklist that covers key considerations for the most common estate planning documents.

Some of the topics we will cover include:

Wills
Living Trusts
Irrevocable Trusts
Powers of Attorney
Living Wills

THRESHHOLD ISSUES

Have you recently changed residency?

If so, ensure that you have established your domicile (i.e., legal home), and that your estate plan is valid under the laws of your domicile.

Do you need to review the applicable laws and any changes that have occurred since you executed your documents (state or federal)?

If so, review how your plan may have been affected, and update it accordingly.

Do you need to confirm and share the location of your original documents?

If so, ensure that your documents are kept in a safe but accessible place, known to your family and/or fiduciaries.

GENERAL POWER OF ATTORNEY

Do you need to confirm the terms of your General POA?

If so, review whether the powers are effective immediately or are “springing” (contingent upon the occurrence of a factor, such as incapacity), and whether they are durable (continue beyond your incapacity).

Do you need to review your appointed agents?

If so, consider the following:

If you name multiple agents, review whether they may act individually or must act jointly. Understand the complexities that can arise when agents must act together, and consider naming individual agents under concurrent General POAs if convenience is a priority.
Confirm that your successor agents are good back-ups for your primary agents.

Do you want to limit your agents’ powers?

Is there a need or good reason to record your General POA?

Have you revoked any prior General POAs?

If so, consider appropriate steps to prevent unauthorized action by your prior agents. In some cases, recording may be advisable or necessary.

HEALTH CARE POWER OF ATTORNEY AND LIVING WILL

Do you need to review your appointed agents?

If so, consider the following:

Given the nature of this role, local or readily available agents may best serve your needs.
If you name multiple agents, review whether they may act individually or must act jointly. Understand the potential inefficiencies and any disputes that could arise among co-agents with respect to your health care.
Confirm that your successor agents are good back-ups for your primary agents.

Are you planning to undergo a health procedure?

If so, consider executing the relevant medical institution’s Health Care POA form, in addition to what you might have in place.

Do you need to review your Health Care POA to confirm HIPAA authorizations?

Do you need to confirm that you clearly expressed your wishes regarding your end-of-life treatment options?

If so, review your Living Will Declaration and your instructions regarding the provision of artificial nutrition, hydration, palliative care, and life-prolonging medical procedures in the event of a terminal condition, vegetative state, etc.

LAST WILL AND TESTAMENT

Do you need to review your Executor/Personal Representative appointments and successors?

If so, consider the following:

Confirm that your appointed fiduciary is qualified to serve under your state laws, and consider whether they are capable of fulfilling their duties.
If you are naming co-fiduciaries, weigh the benefits against the possible complications.

Do you have minor children?

If so, consider the following:

Confirm that your plan includes trust provisions (e.g., in a testamentary trust or in a living trust) to control the timing and amount of access to funds, and to properly support and protect your children.
Name one or more guardians, including successors, to care for your minor children in the event of the death of both parents.
Consider whether the same individual(s) should serve as Trustee(s), or whether a division of responsibility would be more beneficial. When naming a married couple as guardians, consider whether divorce or the death of one party would affect their suitability.

If you hold any testamentary powers of appointment, have you properly exercised them under your Will?

Do you need to review the allocation of the estate and/or inheritance tax burden?

Do you have a plan for your digital assets and information?

Does your Will refer to a tangible personal property memo?

If so, ensure that you have completed the memo according to your wishes.

REVOCABLE LIVING TRUST

Do you need to review your Trustee/Co-Trustee appointments and successors?

If so, consider the following:

Ensure that your appointed fiduciary is qualified to serve under your state laws, and consider whether they are capable of fulfilling their duties.
Weigh the costs and benefits of appointing a corporate fiduciary.

Do you have beneficiaries with special needs?

Do you need to review the allocation of the estate and/or inheritance tax burden for assets passing under your trust?

Does your Will pour over into your trust?

Did you, or do you need to, fund your trust during your lifetime?

If so, consider what assets to convey to your trust, and when. Trust-owned assets will avoid probate at your death.

IRREVOCABLE TRUSTS

Do you have an ILIT?

If so, confirm that the Trustee is properly administering the trust, all premiums are properly paid, and any Crummey Notices are timely issued (if applicable).

Do you have a split-interest trust, such as a CRT or CLT?

If so, confirm that the Trustee is properly administering the trust, and annual payments are properly calculated and made.

Do you have a SLAT or a GRAT?

If so, confirm that the Trustee is properly administering the trust, and that actions do not risk inclusion in your taxable estate.

Do you have a QPRT?

If so, monitor the term of the trust, and plan for the transfer of ownership and the possible need to rent back the residence, observing proper formalities.

Do you need to confirm that income tax returns are properly filed for your irrevocable trust(s)?

Are your actions consistent with the terms of your trust?

MISCELLANEOUS

If you have a premarital agreement, do you need to ensure that your estate plan is in alignment?

Do you need to review your non-probate transfers, to ensure that they align with the planning under your Will and trust?

If so, consider the following:

Assets that are jointly owned or TOD/POD pass by survivorship. Review deeds and account titling to ensure alignment with your overall plan.
Retirement accounts, life insurance policies, annuities, etc. pass by beneficiary designation. Confirm the status of your beneficiary designations with each institution.

Do you need to add flexibility to your plan (e.g., by designating a trust protector), to allow changes should unforeseen circumstances arise in the future?

Are you concerned about a future Will or trust contest?

If you have any questions after reviewing this checklist, please reach out to our professional team anytime at info@shorepointadvisors.com or (732) 876-3777.

This checklist was prepared and first distributed by fp PATHFINDER.

DISCLAIMERS

This material is intended for general public use. By providing this material, we are not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. This is not an offer to buy or sell a security.

Shore Point Advisors is an investment adviser located in Brielle, New Jersey. Shore Point Advisors is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Shore Point Advisors only transacts business in states in which it is properly registered or is excluded or exempted from registration. Insurance products and services are offered through JCL Financial, LLC (“JCL”). Shore Point Advisors and JCL are affiliated entities.