Five Questions to Ask Annually about Estate Planning
Below is another good article from financial planning on five questions to ask annually for estate planning in Leawood. These questions are good to think through from the easy (did you buy a home or vacation home) to the more complex (how has your family changed in the last year).
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5 Estate Planning Questions to Ask Clients Annually
Just as retirement planning should start well before your clients actually retire, estate planning should be an ongoing process. Here are five important questions you should discuss with clients annually to ensure their estate plans are on track.
1. Did you acquire any real property?
“Whenever we’re meeting with a client, we will always ask if they acquired any real property since our last meeting,” says Herb White, CFP, founder and president of financial planning company Life Certain Wealth Strategies, headquartered in Denver. “What often happens is a client will meet with an attorney who will prepare trust documents for the client, but often certain parts of the trust go unfunded. So if they have acquired real property, we want to make certain it is properly titled.”
2. In the past year, did you create or purchase any accounts that require beneficiary designations?
Ensuring that clients’ primary and contingent beneficiaries are up to date is crucial, says White. Assets that carry a beneficiary designation are distributed outside the trust, he notes. Therefore, the trust language will have no impact on these particular assets.
3. Has your family dynamic changed in the past year?
For example, has your client divorced, remarried or had children? These are all events that require review of the estate plan, says Kirsten Waldrip, associate professor of estate planning and taxation at the College for Financial Planning in Centennial, Colo.
“In the event of divorce, your client will likely want to remove the ex-spouse as beneficiary and executor,” she says. “In the event of remarriage, it is important to review the documents to ensure your client’s goals are still met.”
For example, she says, your client may wish to include the new spouse as beneficiary while ensuring that any children of a prior marriage are not disinherited.
4. Do your estate planning documents continue to reflect your wishes?
Advisors in this case should consider whether a will or a trust is more appropriate for each of their clients’ individual situations, says Waldrip. If privacy is a concern, she says, a trust may be more appropriate because it is a private document, unlike a will, which becomes public record.
And advisors at this point should determine whether their estate planning clients are satisfied with the persons designated as their agents under their powers of attorney or as beneficiaries. If not, they should change them, Waldrip says.
5. How is your property titled, and have you made any changes of survivorship?
If your client’s goal is to avoid the probate process, joint tenants with the rights of survivorship may be an option, if permitted by state law, as these forms of ownership have survivorship features.
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