Don’t Let Your Estate Plan Become Expensive Paperwork For
You’ve done the hard work – met with an attorney, drafted documents, signed everything, and got it all notarized.
Your estate plan is complete, right?
Not quite.
Having estate planning documents is just the beginning. Without proper implementation, even the most well-crafted estate plan can become nothing more than expensive paperwork that fails to protect your family and practice when it matters most.
Here are the four most common implementation gaps I see with optometrists' estate planning:
1. Invalid DIY Documents
If you’ve used an online estate planning service, double-check that your documents are properly executed according to your state’s requirements.
I’ve seen too many cases where documents weren’t properly signed, notarized, or witnessed – making them potentially just expensive PDFs.
While I certainly understand that online DIY tools can be helpful when families otherwise wouldn't tackle estate planning, this is one of many, many reasons I highly recommend working with a skilled estate planning attorney.
2. Assets Not Properly Titled
This is especially important if you have a living trust. Think of your trust as a box – it only controls what’s actually inside it. If there are assets that should be owned by the trust, are they titled appropriately?
Common assets that often need retitling include:
Your home – The deed may need to be changed to reflect trust ownership (an attorney should help with this).
Bank accounts and Taxable investment accounts – Individual or joint accounts may need conversion to trust accounts
Practice ownership interests – Make sure your buy-sell agreements and succession planning align with your estate plan
Important note: Retirement accounts can’t be retitled to trusts, but they can name trusts as beneficiaries when appropriate.
3. Outdated Beneficiaries
This is the gap I see most often.
Review beneficiaries on:
- Life insurance policies
- Retirement accounts (401k, IRA, etc.)
- Taxable investment accounts
- HSAs
- 529 plans (really, you'd name successor owners)
- Bank accounts
Ask yourself: Do these reflect my current family situation and estate planning goals?
If your trust should receive these assets, make sure it’s properly named as a beneficiary using the appropriate wording.
For retirement accounts, certain beneficiaries require special care:
- If there are minor children involved, due to tax issues you'd want to confirm with your attorney and financial advisor whether a trust should be the beneficiary.
- If nonprofits or charities are expected to be a beneficiary, you'd likely want to prioritize pre-tax retirement accounts. The beneficiary can receive these tax-free, potentially leaving your heirs to receive more tax-favorable assets.
4. Digital Assets and Access
In today’s digital world, someone needs to access your financial websites, password managers, and online accounts. Consider using a password manager with estate planning features that can grant access to trusted individuals after your death.
When to Review Your Plan
Don’t set it and forget it. Review beneficiaries annually, and pull out your complete estate plan every 3-5 years. Immediate triggers for review include:
- Birth of a child
- Buying or selling your practice, or taking on a new partner
- Moving to a new state
- Marriage, divorce, or remarriage
- Inheriting assets
The Bottom Line
Your estate plan is only as good as its implementation. The goal isn’t just to have documents – it’s to ensure your wishes are carried out and your family and practice are protected.
As financial planners, we often serve as project managers for this process, helping bridge the gap between what’s written on paper and how your accounts and assets are actually structured.
Open communication with your legal and financial pros is so important to making sure that your estate planning keeps up with your life, finances, and changes in tax laws.
Have a great weekend!
Evon Mendrin CFP®, CSLP®
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