October 20 – 26, 2014 is National Estate Planning Awareness Week. How did National Estate Planning Awareness Week come about? I was curious, and maybe you are too.
Photo: Ron Cogswell, Flickr.
On September 27, 2008, the U.S. House of Representatives passed House Resolution 1499, declaring the third week of October as National Estate Planning Awareness Week. What’s a Congressional Resolution? Resolutions are odd legal critters, not quite a law, but acts of Congress nonetheless. According to the Library of Congress’s cool Congressional Glossary, a Simple Resolution, like the one that created National Estate Planning Awareness Week, is legislation related to the operations of a single Congressional chamber or that expresses that chamber’s collective opinion on public policy issues. As an interesting side note, Stacey Romberg from our firm used to work for the U.S. Senate’s Office of the Legislative Counsel, and routinely drafted these resolutions for Senators of both parties.
In the Resolution establishing National Estate Planning Awareness Week, the House noted that 120 million Americans did not have up-to-date estate plans, despite the benefits to individuals and their loved ones from having an appropriate estate plan. As Notre Dame Law School professor William D. Rollinson wrote in his delightfully retro paper, The History of Estate Planning, “There is no part of the law of greater interest to the people of America and England, from the standpoint of numbers, than estate planning.”
This occasion is a great reminder to dig out your estate planning documents and review them to decide whether they need to be updated. As a general rule of thumb, you should review your estate planning documents every five years to evaluate whether everything is accurate and reflects your wishes. Estate planning documents should be updated after you’ve experienced a major life event, such as the birth of a child, marriage, divorce — or death of a family member. If you have children, you’ll also need to evaluate whether you want to change the people you have nominated to serve as guardians responsible for their care or Trustees responsible for any children’s trust created by your Will. And, of course, if the last few years have been very good for your bank account, you may need to execute a new Will that accounts for estate tax planning. In Washington, estates valued at $2 million and above must file an estate tax return. In 2014, the federal estate tax will apply to estates with assets valued at more than $5.34 million.
National Estate Planning Awareness Week is also a great reminder to review and update your beneficiary designations for your nonprobate assets. What is a nonprobate asset? Any asset that passes via a beneficiary designation – and thus outside probate. This can include some bank accounts, retirement accounts, life insurance, and any asset held as “joint tenants with right of survivorship.” What happens if you forget to update those beneficiary designations before the unthinkable happens? Your intentions may be foiled, as the nonprobate asset will be distributed according to whatever beneficiary designations you have on file for the asset. While Washington has a “super will” statute that allows a person to direct the disposition of certain nonprobate assets in their Wills, a better practice is to update the beneficiary designations themselves.
As the House noted in its resolution creating National Estate Planning Awareness Week, “the implementation of an estate plan starts with sound education and planning, and then may require the proper drafting and execution of appropriate legal documents, including wills, trusts, and durable powers of attorney for health care.” I would take a step back from there and suggest that the implementation of an estate plan begins with the decision to learn more about estate planning and perhaps, if you are in a relationship, engaging in a conversation with your partner about the subject.
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