Year-End Financial To-Do: Resolve to Get Your Estate Plan in Shape

Dec 29, 2021

By Jeffrey R. Wolfe, Senior Vice President and Manager, Wealth Planning Strategies

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As we complete this edition of our year-end financial to-do list, it’s time to look at New Year’s resolutions. Maybe you have the traditional “lose weight” or “get in better shape” resolutions, which are all good things. However, consider resolving to get your estate plan in order for 2022 as well.

It’s estimated that more than 50% of adult Americans don’t have an estate plan.[1]  If you’re one of these folks, you need to get started on a plan. Determining where you want your assets to go upon your demise, deciding who may make investment decisions for you if you are unable, and creating directions on your medical care are all important planning decisions that you should consider. If you do not have a plan in place, state law and courts will typically make these decisions for you, usually a costly event that often does not end the way you may desire.

If you have a plan in place, great! But you’re not done! Review your plan this year to make sure it still meets your legacy goals. As life moves on, your goals may change too. Moreover, with things like COVID in the world now, your medical planning may need an update as well. Consider some possible motivators to update your plan:

Life happens. We experience births, deaths, marriages and divorces. Any one of these events may trigger the need to update your plan. Regardless of the event, whenever you have a change in your life you should review your estate plan and your beneficiary designations to ensure that change is accounted for in the way you wish. Failing to do so could leave your assets to an unintended beneficiary.

Many ignore the current estate tax concerns because the exclusions are so high ($12.06 million in 2022) but you may face an estate tax in your state; have you checked? Also, annual gifting exclusions increase in 2022 to $16,000 per person per year that you can utilize. Lastly, recall that the federal estate tax law as written today stipulates that if Congress doesn’t act the exclusion will revert in 2026 to something around $5-6 million.

In short, estate tax laws continue to be fluid and changes can affect your plan. Many plans reference the federal estate tax thresholds and stipulate how and who may inherit based on those thresholds. Do you know if your plan has these references, and if so, do you know what that means with your legacy? If you can’t definitively answer “yes,” then it’s time to review your plan.

How old is your will or trust? Did you create it the week you brought your daughter home, and now you’re celebrating grandchildren? If your plan is dated, it’s likely your net worth has significantly changed as well. Maybe leaving your now sizable estate to a younger beneficiary isn’t such a great idea. Perhaps you now have an estate tax problem. Again, a significant change like this should prompt an estate review.

Even if you don’t feel affected by the above issues, it’s a good idea to review your estate plan every three to five years just to make sure you know what you’ve got. Again, there may be nothing to do, but you should confirm your situation periodically.

Estate planning can be intimidating, and it’s never all that exciting to plan for your own demise or incapacity. Work with your financial advisor – along with your tax and legal advisors – to implement, review and maintain your estate plan. You’ll spend time and money creating your plan, so be sure to follow up regularly to make sure it will work the way you wish.


Benjamin F. Edwards & Co. does not provide legal or tax advice, therefore it is also important to consult with your legal and tax professionals for additional guidance tailored to your specific situation.