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Focus on Estate Planning: Review Your Plan Regularly to Steer Clear of These Planning Pitfalls

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The term “estate planning” means different things to different people at different stages of life. Estate planning should encompass an entire adult lifetime of saving, planning, preparing, and insuring, all with the goal of finishing life well and passing your legacy along to the next generation. Once in a while, then, it’s helpful to step back and consider a list of helpful tips and ominous pitfalls that can either enhance or undermine even a well-intended estate plan.

As part of our emphasis on estate planning here at AgingOptions, we want to bring back to your attention this article originally published on the Fidelity website in late 2019. It’s called “10 Estate Plan Pitfalls to Avoid,” and it begins with a simple premise: estate plans are not a “one and done” proposition.

When Was the Last Time You Reviewed Your Estate Plan?

“Do you remember when you last reviewed your estate plan?” the article asks. “If the answer is when you first signed the stack of documents at your attorney’s office, then you’re not alone. Many of us complete an estate plan and then fail to revisit it for years (and some never do). It is important, however, to review a plan every so often due to ever-changing tax laws and major life events, such as a birth, marriage, divorce, or death.”

Fidelity offers more detail than we have space for here, and we can’t cover all ten pitfalls – but let’s take a partial look at this list of things to watch out for in making your long-term plans.  We encourage you to use this list as a starting place and discuss the details with a planner as part of a more in-depth process. Here’s our abbreviated version of Fidelity’s list.

Have You Updated Your Executor or Trustee?

“A fiduciary is someone who is appointed to take legal control over assets for the benefit of another person,” Fidelity explains. Executors and trustees are the most common types.  “Outdated estate plans often name fiduciaries or successor fiduciaries that may no longer be suited for the position.” Your executor may be too old, for example, or your trustee may have retired or passed away.  “Check to see who you have named as fiduciaries in your estate planning documents to determine whether you need to revisit these designations.”

Does Your Estate Plan Still Treat Your Adult Children as “Little Kids”?

“When a child is young, a key estate planning decision parents often make is to determine a guardian,” says the article. Now that your child is an adult, guardianship is irrelevant, but there is a long list of other considerations.  Have you adjusted your plans to take into account variable such as divorce and remarriage, the rights of step-children, or the fact that one of your kids may be far better off financially than another?

“Periodically review the ways that assets will be left to your children,” Fidelity advises, “and encourage them to have the appropriate estate planning documents in place as they get older and their circumstances change.”

Have You Made Sure Your Health Care Representative Can Access Your Medical Records?

HIPAA, the Health Insurance Portability and Accountability Act, became law in 1996 to protect the confidentiality of medical records and health information. Unless you’ve taken proper steps, these well-intended rules may prevent doctors from sharing information with your loved ones in an emergency. “As a general rule,” says Fidelity, “health care powers of attorney, living wills, and advance health care directives should contain provisions waiving an individual’s HIPAA rights with respect to their health care representatives.”

The advice? “Take stock of your family’s health care powers of attorney, living wills, and advanced health care directives, to ensure that health care representatives can make informed decisions regarding your family’s care.”

Have You Considered the Tax Implications as Your Estate Has Grown?

“Financial security is a goal for us all, but with wealth comes complexity,” says Fidelity. “An increase in wealth not only typically causes an increase in annual income taxes, but it may also beget estate and gift taxes.”  Outdated estate documents may include planning that was appropriate for smaller estates or old estate tax laws. “Take the time to review the formulas in your estate documents with your attorney and tax professional to determine whether the planning you have in place is still appropriate,” the article advises.

Does Your Estate Plan Take Into Account the State-to-State Moves You’ve Made?

If you’ve moved from state to state since your plan was drafted, your plan may be seriously off target. (We discuss this issue this week in another article here on the AgingOptions blog.)

“Each state has its own estate and income tax laws, and it is important to plan appropriately,” says Fidelity. “There are significant differences between [states] when it comes to transferring assets, and a document drafted in a common law property state might not be appropriate in a community property state.” It’s imperative that you make appropriate adjustments. “Review your estate plan with your attorney and tax professional, with an eye toward reducing federal and state estate taxes, and make sure to reevaluate and potentially update your plan to establish residency in another state.”

Does Your Plan Accurately Reflect Your Desire to Give Back?

“For many, with success comes a desire to give back to the community or to causes they feel most passionate about,” Fidelity states. “Many of us, however, forget to include our important charitable causes in our estate plans, so our intentions are often not carried out after our deaths.” Giving has major tax implications and if handled improperly can cause resentment and dissent among your own family. Make sure to discuss your charitable intentions with your estate planning team to ensure that your philanthropic goals are included as part of your plan.

There’s much more on the Fidelity list of estate planning traps: estate taxes, life insurance, family communication, and so on. The bottom line is that estate plans are dynamic, not static. “Many estate plans no longer meet their original intent due to inattention and a lack of routine updating,” Fidelity observes. “Successful estate planning requires more than just having signed the initial documents: Your plan should evolve as your circumstances do.”

My Life, My Plan, My Way: Get Started on the Path to Retirement Success

At AgingOptions we believe the key to a secure retirement is the right retirement plan – yet statistics show that 70 percent of retirement plans fail. That’s why for nearly two decades we’ve been dedicated to the proposition that a carefully-crafted, fully comprehensive retirement plan is the best answer to virtually any contingency life may throw your way as you age.  Our slogan says it all: My Life, My Plan, My Way.

When it comes to retirement planning, most people focus on one fairly narrow issue: money. Financial planning is an important component of retirement planning. However, people heading towards retirement often make the mistake of thinking that a little financial planning is all that’s required, when in fact most financial plans are woefully inadequate. What about your medical coverage? What if you have to make a change in your housing status – will that knock your financial plan off course? Are you adequately prepared legally for the realities of retirement and estate planning? And is your family equipped to support your plans for the future as you age?

The best way we know of to successfully blend all these elements together – finance, medical, housing, legal and family – is with a LifePlan from AgingOptions. Thousands of people have discovered the power of LifePlanning and we encourage you to the same. Simply visit our website and discover a world of retirement planning resources.  Make certain your retirement planning is truly comprehensive and complete with an AgingOptions LifePlan.  Age on!

(originally reported at

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