Many people think of tax season as a time to gather documents, review income, and file returns. However, it can also be the perfect moment to review your estate plan. Your financial information is already top of mind, which makes it easier to spot areas that may need updates.
Even if your plan was carefully prepared years ago, it may benefit from a review today. An estate planning attorney in Overland Park can help ensure your will, trusts, and beneficiary designations still align with your current goals.
Below are five key areas to review during tax season to keep your estate plan current and effective.
Why Is Tax Season a Good Time to Review Your Estate Plan?
When preparing taxes, you gather detailed information about income, investments, retirement accounts, and property. This same information often plays a role in estate planning decisions.
Reviewing your plan during tax season allows you to:
- Confirm that asset values are reflected accurately in your plan
- Identify new accounts or investments that should be included
- Review beneficiary designations and ownership structures
- Ensure your estate planning documents still reflect your wishes
1. Are Your Trusts Still Aligned With Your Goals?
Many people create trusts as part of their estate plan to help manage assets and protect loved ones. However, trusts created years ago may benefit from a review.
In the past, some married couples used trust structures that divided assets into separate portions when the first spouse passed away. These plans were designed around the tax rules in place at the time.
Today, those same arrangements may not always provide the same advantages they once did. In some situations, older trust language may also create unintended tax consequences when assets are eventually sold.
This doesn’t mean the trust is wrong, it simply means it may be worth reviewing. An estate planning attorney in Overland Park can help determine whether your trust still fits your goals or if small updates could make it easier for your loved ones in the future.
2. Have Your Executors, Guardians, or Agents Changed?
Estate plans rely on trusted individuals to carry out your wishes. Over time, those choices may no longer reflect your current circumstances.
You may want to review who you named for key roles such as:
- Executor or personal representative responsible for managing your estate
- Guardian for minor children
- Financial power of attorney to handle financial matters if you become unable to act
- Healthcare power of attorney to make medical decisions on your behalf
People’s lives change. Someone you named years ago may have moved away, become unavailable, or no longer be the right fit for the responsibility. Regularly reviewing these roles helps ensure the people named in your documents are still appropriate.
3. Are Your Beneficiary Designations Up to Date?
Some of your most valuable assets may not be controlled by your will. Accounts with beneficiary designations typically pass directly to the named person.
Common examples include:
- Retirement accounts like IRAs and 401(k)s
- Life insurance policies
- Transfer-on-death (TOD) brokerage accounts
- Payable-on-death (POD) bank accounts
If these designations are outdated or missing, assets could end up going through probate or passing to someone you did not intend.
During tax season, when you review financial statements and account summaries, it’s a good opportunity to confirm that your beneficiary designations match your current estate plan.
4. Have You Experienced Life Changes That Affect Your Plan?
Life rarely stays the same for long. Major life events often require updates to estate planning documents.
Some common triggers for reviewing your estate plan include:
- Family Changes: Marriage, divorce, the birth or adoption of a child, or the addition of grandchildren can all affect inheritance decisions.
- Financial Changes: Receiving an inheritance, selling property, or starting a business may require adjustments to your plan.
- Moving to Another State: Estate laws vary by state. If you moved, your documents may need updates to ensure they comply with local requirements.
Even smaller changes can affect how your estate plan works, which is why periodic reviews are so valuable.
5. Does Your Plan Still Reflect Your Current Goals?
Estate planning is not just about documents; it’s about your values and priorities.
Over time, your goals may evolve. For example, you might want to:
- Adjust how assets are distributed among beneficiaries
- Add protections for younger heirs
- Provide for charitable giving
- Simplify administration for your loved ones
Meeting with an estate planning attorney in Overland Park gives you an opportunity to revisit these goals and confirm that your current plan reflects them clearly.
Key Takeaways
- Trusts created years ago may benefit from a simple review
- Executors, guardians, and powers of attorney should still reflect trusted individuals in your life
- Beneficiary designations should match your current estate planning goals
- Life changes like marriage, new children, or relocation, may require updates
- Regular reviews help ensure your plan continues to protect the people and assets that matter most
Have Your Plan Reviewed Today
Keeping your estate plan up to date can help ensure your wishes are clear and your loved ones are cared for. If tax season has you reviewing your finances, it may also be a good time to revisit your will, trusts, and beneficiary designations. The team at Pearson Bollman Law helps individuals and families take practical steps to keep their estate plans current and aligned with their goals. Request a consultation today.
References: Los Angeles Daily News. (Oct. 20, 2024). Is there a tax trap in your trust? And CNBC. (Jan. 27, 2022).Be sure to keep your will or estate plan updated. Here are 3 key reasons why.