Daniel D. Meiklejohn
JD, CPA, CFP®, CExPTM
Managing Director

Cheers! You have finally signed your new estate planning documents. You can now set it aside and disregard it for years to come. Not so fast! It is common to struggle with pondering death and planning for its impact on the future of your family and wealth. Many may feel that the “work” is now done and the plan is set, but that is certainly not the case. An estate plan needs ongoing attention, and there are key items to continuously monitor, revisit, update, and discuss moving forward.

Let us quickly step back and revisit the essential goals of estate planning. A sound estate plan aims to accomplish the following:

• Ensure assets pass according to your wishes;
• Keep matters private and confidential;
• Maximize asset protection and wealth preservation goals;
• Transfer wealth in the most tax-efficient manner;
• Select desired individuals for fiduciary roles and for guardians for minor children;
• Authorize desired individuals to make certain decisions and perform various matters on your behalf (financial and health care); and
• Minimize unintended consequences for your family and wealth.

Asset Integration

After the estate plan is in place, the integration of assets into the estate plan should be a top priority. Proper integration of assets into the estate plan is imperative. Asset titling and beneficiary designations play a pivotal role in asset integration and impact how an asset will transfer upon death. Assets should be flowing to and through the designed estate plan to ensure the desired plan objectives are likely to be achieved. Assets that are not flowing to and through the designed estate plan risk not being transferred to the desired beneficiaries in the intended manner. To avoid unintended consequences related to asset integration into your designed estate plan, the titling of your assets and the details of your beneficiary designations should be regularly reviewed to ensure alignment with the plan objectives.  

Upon death, an asset that is part of your estate will typically fit into one of the following four titling categories: (i) individual assets, (ii) joint assets, (iii) beneficiary-designated assets, and (iv) assets held in your revocable trust. An individual may have assets that fit one or all these categories. Furthermore, there are multiple types of joint ownership. Each of the above titling categories, along with the distinct types of joint ownership, has distinct rules around transferability at death, inclusion in your probate estate, and scope of ownership. Again, the method of transfer at death for an asset and whether it will transfer pursuant to your estate planning documents is dependent on how it is titled. Based on your estate planning objectives, changes to an asset’s titling may help provide better integration with your estate plan and should be discussed with your advisor team. Be sure to stay on top of how your assets are titled and what that means for your estate plan. 

Beneficiary designations allow you to designate who will receive certain benefits at death and removes the asset from your probate estate by passing title automatically upon death to the designated beneficiary. Beneficiary designation forms may be updated at any time and do override any conflicting provisions in your estate planning documents. Beneficiary designation forms are routinely utilized for life insurance policies and retirement plan accounts. Beneficiaries can also be designated for checking and savings accounts in the form of a payable-on-death “POD” designation form and for investment accounts in the form of a transfer-on-death “TOD” designation form. You should check with your financial institution regarding the availability of the forms and the related steps for their completion. Lastly, and most importantly, forms should be updated and properly filled out to avoid any unintended consequences. 

Ongoing Considerations

Your estate plan should routinely be part of the discussions with your team of advisors. It is helpful to proactively identify areas of your estate plan that should be at the forefront of your overall planning objectives. Below are key steps to consider taking on a regular basis to assist in keeping your estate planning documents in alignment with your current circumstances and overall planning objectives.

• Conduct a review of your estate plan details every few years;
• Maintain an updated and detailed personal financial statement for all assets and liabilities;
• Reconfirm your understanding on how specific types of assets will transfer upon death;
• Assess the impact of the receipt of gifts or inheritance, significant changes in asset values, and the acquisition of unique or complex assets;
• Analyze the need of additional asset preservation and protection planning;
• Revisit beneficiary designation forms on retirement plan accounts and insurance policies;
• Revisit transfer-on-death “TOD” designations for cash accounts and payable-on-death “POD” designations for investment accounts;
• Ensure your advance directive documents are up to date and reflect your current preferences;
• Review and update all fiduciary role and guardianship designations as needed;
• Stay informed about any changes in tax laws that may impact the validity or effectiveness of your estate plan and overall wealth transfer objectives;
• Assess the current dynamic of your family and how current circumstances may warrant more tailored planning and necessitate updates; and
• Reassess your desired long-term goals and objectives for your wealth and your family.

Undoubtedly, there will be new life events and changes that will warrant an assessment of your estate plan. By incorporating the above steps into your review process, your estate plan will remain relevant and effective in meeting your planning objectives over time. As always, an individual’s advisor team, and more specifically, the estate planning advisor, can help guide and provide understanding of the latest laws and regulations that may impact your estate plan and whether any new life events and changes necessitate prompt updates to your estate planning documents.    

Spectrum Wealth Management, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.
Additional information about Spectrum’s investment advisory services can be found in its Form ADV Part 2, which is available upon request. The information in this presentation is
for educational and illustrative purposes only and does not constitute tax, legal, or investment advice. If you have any specific questions about any legal, tax, or financial matter, you
should consult an appropriately qualified professional. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of the
information in this article.