As the New Year begins, tax documents are spread across kitchen tables, pulled from basement boxes, amassed in spreadsheets, and stuffed in mailboxes to CPAs across America. As the saying goes, there are two certainties in life: death and taxes. One is dreaded and the other is often neglected. As a global pandemic extends another season and reminders of our health and longevity flash across headlines, this is your friendly reminder that while you’re digging up those tax documents, revisit your estate plan. An uncomfortable truth is that if you neglect to do your estate planning, the state will do it for you. A comprehensive estate plan includes succession planning, a very different beast from estate planning. A succession plan sets forth how your enterprise (i.e. farm) will continue operating after you are no longer running the business. However, doing one without the other is like rowing a boat without an oar.
To get the most out of your estate planning effort, do these things every year:
- Review your executor(s), beneficiaries, trustee(s), guardian(s), personal representative(s), and other appointed roles under your estate planning documents;
- Review your assets, accounts, life insurance policies, and charitable giving wishes;
- Discuss with your CPA the benefits and limitations on gifting assets during your lifetime;
- Ensure that your estate plan and succession plan compliment, and do not conflict, with each other;
- Ensure that your durable power of attorney and living will are consistent with your wishes.
Some of the most voluminous estate plans may fail to adequately provide for a testator’s desires if they aren’t routinely revisited and updated. Reconsider a plan that leaves your estate planning to others, such as your children or other heirs. Your assets are your responsibility. Leaving difficult decisions to your heirs can leave them vulnerable to discourse and overwhelmed, particularly when they are aggrieved. A relevant, thorough, and thoughtful estate plan may be the best gift you could ever leave behind.