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Billings, MT CPA Firm

Take the Pulse of Your Estate Plan


If you own a business, earn significantly above the average, or have acquired substantial assets over time, you should consider performing a review of your estate plan at least once a year. For your estate plan to be truly effective, you have to ensure it adjusts to changed circumstances in your life. Ask yourself the following questions as a way to determine quickly whether you need to make changes in your estate plan.

Has My Net Worth Increased This Year?

If you have seen your net worth increase substantially over the last 12 months - because of significant capital gains, the receipt of an inheritance, or cashed-out stock options, for example - then you may need to adjust some aspects of your estate plan. The opposite is also true: You may need to make adjustments if the size of your estate has decreased significantly. A large change in the total value of your assets could affect the distribution of your assets, particularly if you have made specific bequests to individuals or charities rather than dividing your estate proportionally.

Are My Estate Planning Documents Current?

Your will is an essential component of your estate plan. It is very important that you keep it current. You may want to change your will if there have been deaths, births, or divorces in your family. And you could also consider changing your will if you are worried about a loved one's ability to handle an inheritance. For example, if you have concerns about a beneficiary's maturity, you could delay or impose conditions on when that beneficiary would gain access to his or her inheritance by creating a trust in your will. In addition, review your beneficiary designations on life insurance policies and retirement accounts to ensure they are up to date.

You should also have a durable power of attorney for health care, also known as a health care proxy. This legal document names a person who can make medical decisions on your behalf if you are unable to make those decisions yourself. A living will is another contingency arrangement that you should consider putting in place. A living will specifies what type of medical care you will accept or refuse as it relates to life-sustaining treatments. If you already have these documents, check to ensure that the person you named in your health care proxy is still willing and able to serve and that your living will still expresses your wishes. Do You Still Have Confidence in Your Choice of Trustee and Guardian?

A trustee has multiple and important responsibilities. It is a job that can be time consuming and sometimes overwhelming. Naming an experienced professional to serve as co-trustee or sole trustee of your trust can help ensure that your beneficiaries will be provided for according to your instructions.

In addition, you might want to confirm that the person you named as guardian for your minor children is still willing to serve in that role. A variety of changed circumstances -- a new job, added responsibilities, or a move out of state -- may make you reconsider whether your children's guardian can be effective in that role.

The advice and thoughtful insights of an experienced financial professional can be exceptionally helpful in reviewing your estate plan.