As the year draws to a close, it’s the perfect time to review your estate plan to ensure it still aligns with your goals and any life changes. This checklist is designed to help California residents make sure their estate plans are up-to-date and equipped to protect their legacy in the coming year.
1. Review Your Will and Trusts
Your will and any trusts are the foundation of your estate plan. Review these documents yearly to confirm they still reflect your wishes, especially in light of any recent life changes. Consider:
- Life Changes: Have there been major life events, such as marriage, divorce, the birth of a child, or the passing of a beneficiary? If so, you may need to update your will or trust to incorporate these changes.
- Asset Updates: Any new properties, investments, or assets should be included in your estate plan. With California’s high real estate values, particularly in the Bay Area, updating for acquisitions or sales is essential.
- Beneficiary Designations: Ensure the beneficiaries listed in your will or trust are correct and reflect your current wishes.
2. Update Your Power of Attorney and Healthcare Directives
Your power of attorney (POA) and healthcare directives specify who will make decisions on your behalf if you are unable. Regular updates are crucial:
- Agent Selection: Is your chosen agent still the best choice? If their circumstances have changed, or if another person is now better suited for the role, consider updating your POA and healthcare directives.
- Scope of Authority: Make sure the powers granted to your agent align with your current needs, particularly if there have been changes in your financial or healthcare situation.
3. Reassess Your Real Estate Holdings
Real estate is often a significant part of California residents’ estates, especially in the Bay Area. Key areas to review include:
- Title and Ownership: Confirm that titles to all properties are aligned with your estate plan, particularly if you’ve bought or sold property recently. Structuring ownership to avoid probate can ease the transition for your beneficiaries.
- Proposition 19 Considerations: California’s Proposition 19 affects property tax reassessments on inherited properties. Review your plan to see how this law impacts your legacy and if adjustments are needed to reduce tax liability for your heirs.
4. Review Retirement Accounts and Life Insurance Policies
Retirement accounts and life insurance policies can make up a substantial portion of your estate. Now is a great time to check:
- Beneficiary Designations: Confirm that the listed beneficiaries on retirement accounts and life insurance policies are up to date and consistent with your estate plan.
- Account Contributions: Consider maximizing contributions to your retirement accounts before the end of the year. This benefits your financial future and has an impact on the assets included in your estate.
5. Tax Planning Considerations
Tax planning is essential for year-end reviews, especially with changing tax laws. Keep these considerations in mind:
- Gifting: The annual gift tax exclusion allows you to give a certain amount to each person without it being subject to federal gift tax. Making these gifts before year-end can benefit both your loved ones and your tax situation.
- Charitable Contributions: If you plan to donate to charity, doing so before December 31 can provide tax advantages while supporting causes that matter to you.
- Estate Tax Planning: Review your estate plan in light of federal estate taxes. Although California does not have a state estate tax, the federal estate tax exemption could be relevant for larger estates.
6. Digital Assets
In today’s digital world, online accounts and digital assets play a key role in estate planning. To protect them:
- Access and Control: Ensure your estate plan includes instructions for managing digital assets like social media, online banking, and email accounts after your passing. Designate a trusted person to handle these.
- Password Management: Update your password list and make it accessible to your designated agent or trustee. Consider using a password manager for secure storage.
By taking time to review and update your estate plan now, you’ll enter 2025 with peace of mind, knowing your affairs are in order. For California residents, where property values are high and estate planning needs can be complex, this year-end checklist can help ensure your plan reflects your current circumstances and goals.
If you need assistance with your estate planning, reach out to Greene Estate, Probate, & Elder Law Firm. Email obed@greenelawfirm.com or call us at (415) 905-0215 to schedule a consultation. Let’s work together to secure your future and protect your loved ones.
Statements in Compliance with California Rules of Professional Conduct: The materials in this article are for educational purposes only and do not constitute legal advice. No attorney-client relationship is created by this article. Individuals should consult an estate planning attorney for personalized advice.
About Attorney Jay Greene, CPA
Jay Greene is the founder of Greene Estate, Probate, & Elder Law Firm in San Francisco, dedicated to helping individuals, couples, and families throughout California secure their future, protect their assets, and preserve their wealth. Visit www.GreeneLawFirm.com for more information or to schedule an assessment.