What Should I Do After Creating an Estate Plan?

Many people get tripped up on the steps that need to be taken after an estate plan has been set up. For those with simple estates, there may not be much to do after meeting with the estate planning lawyer to sign the documents. For others, additional steps need to be taken to ensure that the estate plan will be fully functional once they become disabled or pass away.

Wills

If your estate plan utilizes a Will as the primary tool to transfer your assets, you're basically done after it's been signed and witnessed. You might have assets that are held as joint tenants that need to be updated or beneficiary designations on assets such as life insurance policies and/or retirement accounts that may need to be revised, but generally speaking there's not too much ongoing maintenance. (Although it is still good to periodically review your Will to make sure that you are distributing your assets to the appropriate people or organizations in your life.)

Revocable Living Trusts

Re-titling Assets

If your estate plan utilizes a Revocable Living Trust, then there are still additional steps that need to be taken to ensure that the trust is what governs the use and transfer of your assets. The primary focus here is on ensuring that assets (other than those that utilize beneficiary designations such as life insurance policies or retirement accounts) are re-titled in the name of the trust. Usually, this means that your property, which you might have previously owned as "John Doe, a single man" will now be owned as "John Doe, as Trustee of the John Doe Living Trust dated January 1, 2018". You will want to change the title to bank accounts, brokerage accounts, real estate, interests in any business entities (e.g., stock or membership interests in an LLC) accordingly. You will also want to revise the beneficiary designations on life insurance policies and/or retirement accounts. 

Beneficiary Designations

For life insurance policies, we generally recommend listing your trust as the primary beneficiary, the idea being that the proceeds from the policy should be distributed in accordance with the wishes stated in your trust. For retirement accounts, spouses will often name each other as the primary beneficiary, and then name their trust as the secondary beneficiary. The purpose for the different approach here is that the law allows for surviving spouses to convert retirement accounts for which they are beneficiaries into a "spousal rollover IRA", which then permits the spouse to continue tax-deferred growth of the retirement account. The trust is named as a secondary beneficiary so that the retirement account can escape probate after the surviving spouse passes away. Single individuals may name their trust directly as a primary beneficiary.

Business as Usual

Making sure that assets are re-titled in the name of the trust and that appropriate beneficiary designations are updated, can be the most time-consuming and frankly annoying part of the estate planning process. After it's done, there's generally no difference in how you live your day-to-day life, and things such as income tax returns and other obligations continue to be the same as they were before you created your estate planning documents.