Why Reviewing your Estate and Financial Documents Must Be a Regular Occurrence

  • Clifford M. Cohen,
  •   Estate Planning
  •   Comments Off on Why Reviewing your Estate and Financial Documents Must Be a Regular Occurrence

I applaud those of you who have taken the time to do an estate plan and protect your assets for yourself and your children. But is it enough to simply place those documents in a safe deposit box at a bank or fireproof safe (“Security Box”) within your home and think that you are done?

The answer is empathically “No”. First, regarding your legal documents, it is critical that you review your Will, Financial Power of Attorney, Medical Directive and Revocable Living Trust, if any, from time to time (at least every three years) to ensure that your documents are up to date and meet your goals and objectives. Not only do laws change, but the lives of those who you have entrusted to take care of your assets and provide for the well–being of your loved ones (”Fiduciaries”), change as well. Due to situations in their own lives, whether from advanced age or otherwise, they may no longer be the appropriate persons to manage your children’s assets.

Furthermore, as your children grow and mature, their needs also change. Concerns about education may be supplanted with a desire to protect them from potential creditors or a marriage to someone with whom you are not comfortable. In addition to the changing lives of your children and Fiduciaries, your life will change as well. Issues regarding your own health and long-term care may take precedence over taxes, avoidance of probate, and other more traditional estate planning concerns.

Finally, in addition to keeping your legal documents current, you also should review your financial records, (bank accounts, CD’s, brokerage accounts, stock certificates, insurance policies etc.) regularly, and make sure that these accounts contain current assets and values. Destroy old statements  or other documents that are no longer valid or in existence and ensure that there is current contact information for each existing account.  An organized Security Box with everything up to date and in one safe location can be extremely beneficial during a time of crisis as your Trustee, Executor or Agent under your Power of Attorney assumes responsibility and management of your assets. Unfortunately, my experience is that clients often leave their Fiduciaries with a pile of papers, containing account information that is often old and outdated. This requires Fiduciaries to peruse through a mound of paper work and decipher information in order to determine whether accounts are still in existence and have value. The failure to review these records on an ongoing basis and establish an organized Security Box creates unnecessary stress, and sometimes even chaos, during a time of crisis.

So open your Security Box regularly and review your legal and financial documents. Your loved-ones will be grateful that you did.