Annual Estate Planning Checklist: What to Review Each Year

By Graham Ewing, CFP®, MBA, Director of Financial Planning Standards

After signing their estate documents, most people put them in a drawer and move on with life. Life keeps moving after that, though. A grandchild arrives, or the friend you named as executor moves across the country. An IRA you opened years ago may still list a beneficiary you would not choose today. None of these changes updates your plan on its own.

A once-a-year review is a simple way to keep your documents current as your life changes. For many families, that means setting aside an afternoon to review your paperwork and note anything that needs a call to your estate planning attorney or financial advisor. Not every step below will apply to you, and the legal documents themselves should always be drafted and updated by a licensed estate planning attorney.

If you would rather work through this on paper, you can download the printable Annual Estate Planning Checklist and check items off as you go.

What an Annual Estate Plan Review Covers

Your Documents

The legal papers that speak for you if you can’t speak for yourself

• Will and any trust
• Financial power of attorney
• Advance directive

Your Accounts

How each asset is set up to pass to the people you choose

• Beneficiary designations on retirement accounts and life insurance
• Titling on new property and accounts
• Transfer-on-death registrations
• A list of personal items and who should receive them
  

Your Gifts

What you plan to give this year, and the most tax-efficient way to give it

• Annual exclusion gifts to family
• Tuition or medical bills paid directly
• Charitable gifts from an IRA
• Loans to family members

Your Family

The conversations and records that help the people you love when the time comes

• Who you named in key roles, and why
• Where your documents are kept
• Funeral and final wishes

Start With What Changed This Year

Begin by listing the life changes from the past 12 months. A birth, death, marriage, or divorce in the family can affect who inherits and who makes decisions for you. So can a move to another state, selling a business, retiring, or receiving a large inheritance. Write each change down, even the ones that seem small, so you can bring the list to your attorney.

Then ask your attorney whether any law changes affect your plan. Federal estate and gift tax rules can change with new legislation, and the exemption amounts adjust for inflation each year. Maryland residents should also know that the state has its own estate tax and an inheritance tax, and the state estate tax applies at a much lower level of assets than the federal one. A quick conversation can tell you whether your documents still reflect current law.

Make Sure the Right People Are Named

Your estate plan names people to act for you, and those choices deserve a fresh look each year. Review who you chose as executor and trustee, the guardian for any minor children, and the agents under your powers of attorney.

Over time, people in these roles may move away or face their own health concerns. The sibling who made sense 10 years ago may now live across the country, and a grown child may be ready for a responsibility that once felt like too much to ask. It also helps to name a backup for each role, so your plan still works if your first choice cannot serve.

Confirm Your Core Documents Still Work

Read through your will and any trust documents with this year’s changes in mind. If they were signed in another state, or before a major life event, ask your attorney if they need an update.

Your financial power of attorney names someone to handle your finances if you become unable to. Without one, even a spouse may be unable to manage retirement accounts or sell a jointly owned home on your behalf, and the family may need to ask a court for that authority. Some banks and brokerage firms hesitate to accept older documents, so note the date yours was signed.

In Maryland, an advance directive lets you name a healthcare agent to make medical decisions for you and record your end-of-life wishes. Give a copy to your agent and your doctor, and tell your family where the original is kept.

Finally, keep a list of where everything is. Write down where your will, insurance policies, and account statements are stored, along with contact information for your attorney, advisor, and tax preparer. Add a plan for digital access, such as a password manager that one trusted person can access, and turn on the legacy contact settings for your phone and email. Then tell at least one person where to find the list. For more on why this step is so important, watch Protecting Your Loved Ones From Financial Chaos.

Check Your Beneficiaries and How Your Assets Are Titled

Retirement accounts, life insurance, and annuities pass to the people named on their beneficiary forms, and those forms generally take priority over your will. That makes them one of the easiest places for an estate plan to drift out of date. Confirm both the primary and contingent beneficiaries on each account, especially after a marriage, divorce, or death in the family.

Next, look at any property or accounts you added this year, such as a new home or brokerage account, and confirm how each one is titled. If you have a revocable living trust, assets generally need to be titled in the trust’s name to pass outside of probate. For accounts held outside a trust, ask whether a transfer-on-death or payable-on-death registration fits your plan.

Personal belongings deserve attention too. Jewelry, artwork, and family keepsakes often carry more emotional weight than financial value, and they can cause tension after a death. Keep a written list or letter of instruction with your estate documents so your family knows your wishes. Ask your attorney how that list should work alongside your will.

Plan the Year’s Gifts

If giving to family or charity is part of your plan, an annual review is a good time to map out the year ahead.

Each year, the IRS allows you to give up to a set amount to as many people as you like without using any of your lifetime estate and gift tax exemption. The amount adjusts for inflation, so check the current figure before you give. Married couples can often combine their limits for each recipient, although doing so may require filing a gift tax return. Gifts to a trust can come with extra paperwork, so speak with your attorney before making one.

Payments made straight to a school or medical provider on someone else’s behalf do not count toward that annual limit. The money must go directly to the institution, not to the student or patient, and while tuition qualifies, room, board, and books do not.

Once you are 70½, you can give directly from a traditional IRA to a qualifying charity, and the gift is not counted as taxable income. After you reach the age for required minimum distributions, these gifts can also count toward the amount you must withdraw for the year. The annual limit adjusts for inflation, so confirm the current figure with your tax professional.

If you have lent money to a child or relative, confirm the loan is in writing and that payments are coming in as agreed. Loans between family members generally need to charge at least a minimum interest rate set by the IRS to avoid gift tax questions. Your will may also need to say whether an unpaid balance counts against that person’s share of the estate.

Share Your Wishes With Your Family

You don’t need to reveal every dollar amount to your children. Letting them know who you named in key roles and where your documents are kept can prevent confusion later. Explaining your reasons now, in your own words, can also help prevent hurt feelings after you’re gone. Family gatherings around the holidays can be a natural time to start.

It also helps to write down your funeral and final wishes, including your preferences for a service, burial or cremation, and any prepaid arrangements you have made. Planning ahead spares your family from making these choices under pressure and gives them a clearer sense of the costs involved.

Bring in Professionals When Needed

Once you have worked through these steps, you might have some questions. Your estate planning attorney, who drafts and updates your legal documents, can answer some of them. Others involve beneficiary forms, account titling, gifting, and taxes, areas where a financial advisor and tax professional can help. When your advisor and attorney share information, the financial and legal sides of your plan are more likely to stay aligned.

Make the Review a Yearly Habit

Pick a time of year that works for you and return to it each year. Some people like January as a fresh start; others prefer the weeks before a holiday gathering, when family conversations come more naturally; or tax season, since many of the same documents are already on the table. Regardless of your review schedule, don’t wait for your annual check-in if you experience a major life event, like a marriage, a death in the family, or a move to another state.

An estate plan is one of the last things you do for the people you love. A few hours each year can keep it working as you intended and spare your family the burden of sorting through outdated paperwork at a difficult time.

How Consulate Wealth Can Help

Our Consulate Wealth advisors review the financial side of your estate plan with you each year, and we work with your estate planning attorney to help keep your accounts and your documents in agreement. Many of our advisors are also CPAs, so we can include the tax questions in this article in the same conversation. If you are not yet a client, our Financial Physical® is a comprehensive review of your plan and your taxes that you receive before deciding whether to work with us.

To start a conversation with our team in Hunt Valley, call (410) 823-7283 or contact us through our website.

 

Frequently Asked Questions

How often should you review your estate plan?

Reviewing your estate plan once a year, and again after any major life change, is a common recommendation. A yearly review catches smaller updates, such as a new account or an outdated beneficiary form. Major events like marriage, divorce, a death in the family, or a move to another state call for an immediate review, even if your annual check is months off. 

What should an annual estate plan review include?

An annual estate plan review should include your will and any trust, your financial power of attorney and advance directive, and the beneficiary designations on your retirement accounts and life insurance. It’s also a good time to confirm how new assets are titled and to plan the year’s gifts. Many people use the review to check whether the people named in key roles are still the right choices.

Do beneficiary designations override a will?

Yes, beneficiary designations generally override a will. Retirement accounts, life insurance policies, and annuities pass directly to the people named on the beneficiary form, regardless of what the will says. For that reason, checking these forms each year is one of the most important parts of an estate plan review.

What happens if assets are not titled in my revocable trust?

Assets that are not titled in a revocable living trust, and that have no beneficiary or transfer-on-death designation, generally pass through probate. Probate is the court process that oversees the transfer of a person’s assets after death, and it can add time and cost for the family. Your estate planning attorney can confirm which of your assets should be retitled.

Can a financial advisor update my will?

No, a financial advisor cannot draft or update a will. A licensed estate planning attorney should prepare wills, trusts, and powers of attorney. A financial advisor can help by reviewing beneficiary designations, account titling, and the tax side of your plan, and by working with your attorney so the financial and legal pieces fit together.

About Graham 

Graham Ewing, CFP®, is a Wealth Advisor and Director of Financial Planning Standards at Consulate Wealth. He works with clients to navigate the financial side of major life transitions, focusing on tax planning, estate planning, investment planning, and retirement planning.