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As the year winds down, many Long Island and New York Metro Area families focus on holiday preparations and reflection. This is also an ideal time to review your estate planning documents and ensure your loved ones are protected. Whether you're creating your first will or updating existing plans, taking these steps now can provide peace of mind heading into the new year.
Don't wait until it's too late—if you need help organizing your estate planning documents before year-end, call (929) 590-5053 or fill out our online contact form today.
Why Year-End Estate Planning Matters
The end of the year serves as a natural checkpoint for reviewing your family's financial and legal affairs. Life changes happen throughout the year—new babies, marriages, divorces, asset acquisitions, or the loss of loved ones. Each of these events can affect how your estate should be structured. Additionally, tax laws and regulations may change from year to year, making it important to verify that your current plan still aligns with current requirements and your family's needs.
Taking time now to address these matters means you won't carry unfinished business into the new year. It also ensures that if something unexpected happens, your family won't be left scrambling to figure out your wishes or navigating complex legal processes without guidance.
Review and Update Your Will
Your will is the cornerstone of your estate plan. This document outlines how you want your assets distributed after you pass away and who should care for your minor children. If you haven't created a will yet, now is the time to do so. New York State has specific requirements for valid wills, and working with an attorney can help ensure your document meets all legal standards.
If you already have a will, pull it out and review it carefully. Ask yourself these questions:
- Are all the beneficiaries still the people you want to inherit your assets?
- Have any of your named beneficiaries passed away or become estranged from your family?
- Do you have new assets that aren't addressed in your current will?
- Are the guardians you named for your children still your first choice?
- Has your executor moved away or become unable to serve in that role?
Even small life changes can require updates to your will. For example, if you've purchased real estate, started a business, or received an inheritance, these assets should be reflected in your estate plan. Similarly, if relationships have changed, you'll want to ensure your will reflects your current wishes.
Check Beneficiary Designations
Many assets pass outside of your will through beneficiary designations. These include life insurance policies, retirement accounts like 401(k)s and IRAs, bank accounts with payable-on-death designations, and investment accounts. Because these assets transfer directly to the named beneficiaries, they bypass the probate process—but only if your designations are current and correct.
Review each account to confirm the beneficiary information is up to date. A common mistake occurs when someone forgets to update beneficiaries after major life events. For instance, if you divorced but never changed the beneficiary on your life insurance policy, your ex-spouse could receive those funds regardless of what your will states. The same applies if you've remarried, had children, or experienced the death of a previously named beneficiary.
Contact each financial institution to request current beneficiary forms. Make any necessary changes and keep copies of the updated forms with your other estate planning documents.
Evaluate Your Power of Attorney Documents
A power of attorney allows someone you trust to make decisions on your behalf if you become unable to do so yourself. There are different types of powers of attorney, and it's important to have the right ones in place for your situation.
A financial power of attorney gives your chosen agent the authority to manage your financial affairs, such as paying bills, managing investments, or handling real estate transactions. A healthcare power of attorney (also called a healthcare proxy in New York) allows your agent to make medical decisions for you if you're incapacitated. These documents become especially important if you're hospitalized or experience a medical emergency.
Review your current power of attorney documents to ensure the people you've named are still appropriate choices. Your agent should be someone you trust completely, who understands your values, and who is capable of handling the responsibilities involved. If your previously named agent has moved far away, developed health issues, or your relationship has changed, consider updating these documents with a new appointment.
Update Your Healthcare Directives
Healthcare directives communicate your wishes about medical treatment if you're unable to speak for yourself. In New York, a living will or healthcare directive typically addresses issues like life-sustaining treatment, artificial nutrition and hydration, and resuscitation preferences. These documents work alongside your healthcare power of attorney to provide comprehensive guidance for your medical care.
Discussing these topics with your family can be difficult, but it's far better to have these conversations now rather than leaving your loved ones to guess what you would have wanted during an already stressful time. Share your healthcare directives with your designated healthcare agent, your primary care physician, and close family members so everyone understands your wishes.
Review Your Trust Documents
If you've established a trust as part of your estate planning and administration strategy, year-end is an excellent time to review its terms and ensure it's properly funded. A trust is a legal arrangement where assets are held by a trustee for the benefit of your chosen beneficiaries. Trusts can help avoid probate, provide privacy, protect assets, and potentially reduce estate taxes.
However, a trust only works if you've actually transferred assets into it—a process called "funding" the trust. Review your trust documents and verify that all intended assets have been properly retitled in the name of the trust. Real estate, bank accounts, investment accounts, and business interests may all need to be transferred. If you've acquired new assets since creating the trust, determine whether they should be added.
Also confirm that your chosen trustees are still willing and able to serve. The trustee role comes with significant responsibilities, and you need someone reliable who will honor your intentions.
Organize Important Documents
Even the most comprehensive estate plan won't help your family if they can't find the documents when needed. Create a centralized location for all your important papers, and let your trusted family members or executor know where to find them. Consider keeping the following in a fireproof safe or secure location:
- Original will and any codicils (amendments to your will)
- Trust documents
- Power of attorney forms
- Healthcare directives and living will
- Life insurance policies
- Deeds to real estate
- Vehicle titles
- Bank and investment account information
- Business ownership documents
- Digital asset access information (passwords, online accounts)
Create a list of all your accounts, including account numbers and contact information for each institution. Also compile information about outstanding debts, recurring bills, and other financial obligations. This inventory will be invaluable to your executor or family members when the time comes.
Consider Tax Implications
Estate planning isn't just about distributing assets—it's also about minimizing the tax burden on your beneficiaries. New York has its own estate tax separate from the federal estate tax, and the rules can be complex. The New York estate tax exemption amount may differ from the federal exemption, and certain planning strategies can help reduce or eliminate estate taxes for your heirs.
Gifting strategies, charitable contributions, and proper structuring of your estate can all impact the taxes your estate may owe. If your estate is substantial or includes complex assets like business interests or multiple properties, consulting with an attorney who understands both New York and federal estate tax laws can help you make informed decisions.
Address Digital Assets
In today's digital age, your estate plan should account for online accounts, digital files, cryptocurrencies, and social media profiles. These digital assets have real value and may contain important information or sentimental content your family will want to preserve or access.
Create an inventory of your digital assets and provide instructions for how you want them handled. This might include email accounts, social media profiles, online banking, photo storage, cryptocurrency wallets, and subscription services. Some states, including New York, have enacted laws regarding digital asset access, but having clear instructions in your estate plan makes the process much easier for your loved ones.
Store login credentials securely, and give your executor or trusted family member information about how to access them. Some people use password manager services that can be shared with designated individuals upon death.
Communicate With Your Family
One of the most overlooked aspects of estate planning is communication. While you don't need to share every detail of your estate plan, having conversations with key family members can prevent confusion and conflict later. Let your adult children know you have a will and where to find it. Discuss your choice of executor with that person to ensure they understand the responsibility and are willing to serve. Talk to your designated healthcare agent about your medical care preferences.
These conversations can be uncomfortable, but they demonstrate care for your family. You're giving them the information and tools they'll need to honor your wishes and navigate a difficult time. Clear communication now can prevent disputes and hurt feelings among family members after you're gone.
Schedule an Estate Planning Review
Life changes constantly, and your estate plan should evolve with it. Even if you reviewed your documents recently, significant life events warrant another look. Major changes that should trigger an estate plan review include marriage or divorce, the birth or adoption of children or grandchildren, significant changes in your financial situation, moving to a different state, changes in tax laws, the death or incapacity of a beneficiary or fiduciary, and starting or selling a business.
Make estate planning review a regular habit—ideally every three to five years, or whenever a major life event occurs. This ensures your plan remains aligned with your current wishes and circumstances.
Get Help With Your Year-End Estate Planning in New York
Taking control of your estate planning before the new year provides protection and clarity for your family's future. From updating your will to organizing digital assets, each item on this checklist plays a role in ensuring your wishes are honored and your loved ones are cared for. Don't let another year pass without addressing these important matters.
Call (929) 590-5053 or complete our online contact form to schedule a consultation with Anderson, Bowman, Wallshein PLLC and get your estate plan in order before year-end.