Time to Review Your Estate Plan

A strong estate plan is not just about having documents in place. Over time, your life evolves, your family changes, and past decisions may no longer reflect your current situation. If it has been a while since you reviewed these details, it is worth taking another look to ensure your plan plays out the way you intend.

Beneficiary Designations

Certain assets, like retirement accounts and life insurance, pass based on the beneficiary form on file. Non-retirement bank and investment accounts can also name beneficiaries through Transfer on Death (TOD) designations. These instructions are typically followed regardless of what is written in your will.

Over time, beneficiary designations can fall out of date. An account may still list a former spouse, exclude a new family member, or name someone who is no longer living. These issues are easy to fix, but only if identified. You want to confirm the right people are listed and that the allocation reflects your intent.

There is also a practical benefit. Assets with designated beneficiaries typically transfer directly to heirs and avoid probate, helping save time and reducing costs for your family.

Reviewing Older Irrevocable Trusts

Many older irrevocable trusts were created under very different tax rules, when estate tax planning was a primary concern. Today, with higher Federal estate exemption levels ($15 Million per individual), those same structures may no longer be solving the same problem and can sometimes create unnecessary complexity.

The primary focus of most credit shelter and bypass trusts was to reduce potential estate taxes. As laws have changed, these same trusts can sometimes create new challenges, including higher income taxes, reduced flexibility, or missed opportunities for a step-up in cost basis.

That does not mean your trust is no longer useful. It simply means it is worth revisiting to make sure it still aligns with your current goals.

In some cases, there are opportunities to improve efficiency without starting from scratch. This may involve adjusting distributions, reconsidering where the trust is administered for state tax purposes, or updating the structure if it no longer fits.

That said, any changes should be made thoughtfully and in coordination with a qualified trust and estate attorney. These entities can be complex, and it is important to fully understand the options available and the potential legal and tax implications before adjusting.

The key is to shift your mindset from “this is already done” to “is this still working the way it should?” A periodic review can help ensure your trust remains efficient, flexible, and aligned with both your financial goals and your family’s needs.

Updating Trustees and Successor Trustees

As you review your trust, don’t overlook who is named as trustee and successor trustee. These roles have a direct impact on how your plan is carried out. The trustee manages the trust today. The successor trustee steps in if the primary trustee can no longer serve.

Many people default to naming a family member. That can work well, but it can also create challenges. Serving as trustee takes time and may require making difficult decisions that affect other family members.

You can also consider a disinterested or corporate trustee. A disinterested trustee does not benefit from the trust, which can help remove some of the emotional pressure. A corporate trustee brings experience, structure, and independence, but is less personal and comes with a cost.

In some cases, a combination can make sense, pairing a family member with a professional.

Ask yourself:

• Will this person be able and willing to serve years from now?
• Can they make difficult decisions objectively?
• Do they understand the responsibilities involved?
• Do they have the time and capacity to handle it?

Thinking through this now can help prevent issues later.

Stay Proactive

You do not need to revisit your entire plan every year, but you should review it periodically and after major life events. These decisions may seem minor, but they can significantly impact how your plan plays out. A simple review today can help avoid unnecessary complications and make things much easier for your family down the road.

For informational and educational purposes only. The information is not intended to provide specific advice or recommendations, and the information has been obtained from sources believed to be reliable. 

Carnegie Investment Counsel (“Carnegie”) is a registered investment adviser with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. For a more detailed discussion about Carnegie’s investment advisory services and fees, please view our Form ADV and Form CRS by visiting: https://adviserinfo.sec.gov/firm/summary/150488.

You may also visit our website at: https://www.carnegieinvest.com.