Estate plans need to be carefully reviewed and updated at least every 3-5 years, and more frequently if life is bringing changes. For example, do the people you designated for key roles like power of attorney, executor or trustee still have the time and wherewithal to carry out their responsibilities? What else may have changed?
People, Pets, Laws, Finances, Capacity…
So much can shift–and much of it is beyond our control. We can, however, review our plans, check in with those we love and trust, and be as organized as possible. Doing so means that as we age or experience unexpected life events, our intentions, and the details needed to execute them, are well understood. When reviewing an estate plan, a good place to start is with the people designated to carry out key responsibilities, like power of attorney for finances, health care proxy, the executor named in a will, and the trustee named in a trust agreement. Although you may be inclined to tap the same individual for all these roles, ideally, you have involved a few different people, since the duties can become overwhelming. Be careful, however, about naming multiple people to carry out the same role, as this could require an impractical level of logistical coordination every time even a small action, like signing a form, is needed. At Kiplinger, among the tips David Rodeck shares for updating estate plans are the importance of designating back-up fiduciaries, and proactively communicating with all those who should be in the know on your affairs:
- You should name a backup for estate planning roles such as executor of your will, financial power of attorney and health care agent. That way, if one predeceases you, someone else will be able to step up. If your primary selection is about your age, name a younger loved one as a backup.Your loved ones should know where to find your estate planning documents. You should also discuss inheritance plans while you’re alive so people aren’t surprised….
- Proactively give health care providers your living will and health care POA, especially before a major surgery. Most will ask for these documents as part of the admitting process….
- If you have pets, you could lay out in your will who will take care of them after you die and leave them money to do so. You could also set up a pet trust designed to pay out enough money each year to cover your pet’s bills.
Another action step for keeping your estate plan up to date if it involves a trust, is to make sure you have properly designated assets to it:
Trusts aren’t a “draft-it-and-forget-it” proposition. Notably, a trust won’t do you any good if it isn’t properly funded, including additions that are warranted. For example, you may neglect to move certain assets — including cash, securities, real estate, artwork and other types of property — into the trust … .This may defeat your estate planning intentions … .Make sure to retitle assets in the name of the trust. This is often easier said than done and will require you to meet specific requirements depending on the asset type … .If you fail to retitle assets, they’ll fall outside the scope of the trust. This means they’ll have to go through probate like other assets in your name. The probate process can be costly and time consuming, depending on which state you live in … .Even worse, you don’t derive the benefits of using a trust for those assets unless those assets are eventually transferred into the trust….
Good To Know: Professional Fiduciaries & Bonds
When updating an estate plan, it may be wise to consider appointing a professional fiduciary. Shifting family structures, including having friends and loved ones stretched out around the world, as well as aging solo, can make the designation of a professional fiduciary a wise choice. Legally bound by duties like loyalty and prudence, professional fiduciaries are obligated to demonstrate a high standard of care in carrying out their responsibilities.Though often lawyers, professional fiduciaries can also be accountants, other financial professionals, or even a bank or trust company. Essentially, a professional fiduciary is bound by the requirements of fiduciary duty to “prioritize the interests of the beneficiary over their own,” as they carry out their responsibilities.
Because of the significant responsibilities involved in serving as a fiduciary, a type of bond, sometimes referred to as a fiduciary bond, is frequently required. Depending on the specific responsibilities to be undertaken by the fiduciary, the bond may alternatively be referred to as a conservator, guardian, trustee, personal representative, executor or estate bond. Essentially, every type of fiduciary bond serves as a guarantee that duties will be carried out in accordance with the law and in the best interests of beneficiaries. Colonial Surety Company makes it easy and speedy for fiduciaries in every state of the country to obtain their bonds: simply: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere.
Obtain Digital Fiduciary Bonds HERE
Bond Solutions for Professional Fiduciaries
When families turn to you for guidance and peace of mind, your time is of the essence. That’s why we put digital fiduciary bonds at your fingertips via The Partnership Account® for Professional Fiduciaries. With this online platform from Colonial Surety, you’ll get off to a quick, efficient and excellent start with every client:
- Access our library of instant, digital fiduciary bonds, including: guardian, conservator, executor, personal representative, administrator, trustee and more.
- Secure precisely the right bond for every circumstance, in every state of the country, every time a bond is needed.
- After selecting the needed bond, just enter payment, and download. That’s it–get back to the essential duties of your day.
As direct, national bond writers, Colonial Surety Company is pleased to back you up, so you can stop wasting time on bond searches, applications and processing delays.The work of every professional fiduciary deserves a great partner. We’re here to help:
The Partnership Account® for Professional Fiduciaries
Founded in 1930, Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA. Our customers have awarded us a 4.8 Trustpilot score.Whenever and wherever you need a bond, trust Colonial: www.colonialsurety.com