Retirement is one of life’s biggest transitions. After decades of working, saving, investing, and building a life, your focus begins to shift from accumulating wealth to determining how you want to use, protect, and eventually transfer it.
You may already have a Will or Trust that you created years ago. But an estate plan designed when you were raising children, building your career, or purchasing your first home may no longer reflect your current assets or priorities.
Before you retire, take the opportunity to review your entire estate plan and make sure it is prepared for the next chapter.
Here are some of the most important items to include on your pre-retirement estate planning checklist. Before retirement, a Marysville, WA estate planning lawyer can help review your estate plan and ensure it reflects your current assets, priorities, and goals.
1. Review Your Will
Start with your Last Will and Testament.
If it has been several years since you signed it, review the document with fresh eyes.
Ask yourself:
- Are the beneficiaries still correct?
- Is your chosen Personal Representative still the right person?
- Have there been marriages, divorces, births, or deaths in the family?
- Does the distribution of your estate still reflect your wishes?
- Have your assets significantly changed?
A Will created decades ago may still be legally valid, but that does not necessarily mean it is still the right plan for you.
2. Review Your Revocable Living Trust
If you have a Revocable Living Trust, retirement is an important time to review both the terms of the Trust and how it has been funded.
Consider whether:
- Your successor Trustee is still appropriate;
- Your beneficiaries are current;
- The distribution provisions still reflect your goals;
- Your real estate is properly titled;
- New financial accounts have been coordinated with the Trust; and
- Assets acquired since creating the Trust have been properly addressed.
Remember, signing a Trust is only the first step. A Trust works most effectively when your assets and beneficiary designations are properly coordinated with it.
3. Review Your Beneficiary Designations
For many retirees, retirement accounts represent a significant portion of their wealth.
Assets such as 401(k)s, IRAs, life insurance, and certain financial accounts generally pass according to beneficiary designations rather than the instructions in your Will.
Review the primary and contingent beneficiaries on:
- 401(k)s and other employer-sponsored retirement plans;
- Traditional IRAs;
- Roth IRAs;
- Life insurance policies;
- Annuities;
- Payable-on-death accounts; and
- Transfer-on-death accounts.
Beneficiary designations completed many years ago may no longer reflect your current family or estate planning goals.
They should be reviewed as part of your overall estate plan—not separately from it.
4. Revisit Your Financial Power of Attorney
Who would manage your finances if you were unable to do so yourself?
Your Financial Power of Attorney allows you to name someone you trust to handle certain financial matters on your behalf.
Before retirement, review who you have selected and consider whether that person is still willing and able to serve.
Your agent may eventually need to assist with:
- Paying bills;
- Managing financial accounts;
- Handling real estate matters;
- Communicating with financial institutions;
- Managing insurance matters; or
- Addressing other financial responsibilities.
The person you selected fifteen years ago may not be the person you would choose today.
5. Review Your Healthcare Documents
Your healthcare planning deserves the same attention as your financial planning.
Review your Healthcare Power of Attorney and Healthcare Directive to make sure they accurately reflect your current wishes.
Ask yourself:
- Who do I trust to make medical decisions for me?
- Does that person understand my wishes?
- Have my healthcare preferences changed?
- Are my alternate decision-makers still appropriate?
It is also important to have conversations with the people you have selected. A legal document provides authority and guidance, but discussing your wishes ahead of time can make difficult decisions easier for your loved ones.
6. Evaluate Your Washington Estate Tax Exposure
Washington has its own estate tax system, separate from the federal estate tax.
As you approach retirement, your estate may be significantly larger than it was when you originally created your estate plan.
When evaluating the value of your estate, remember to consider more than the balance of your checking and savings accounts.
Your estate may include:
- Your home and other real estate;
- Retirement accounts;
- Investment accounts;
- Business interests;
- Life insurance;
- Valuable personal property; and
- Other assets.
For homeowners throughout Bellevue, Kirkland, and the greater Seattle area, real estate appreciation alone can have a significant impact on overall estate value.
If your wealth has grown substantially, estate tax planning should be part of your pre-retirement conversation.
7. Decide Whether Your Children Should Inherit Outright or in Trust
When your children were younger, your estate plan may have included Trusts that held assets until they reached certain ages.
Now that your children are adults, you may need to reconsider how you want them to inherit.
An outright inheritance may make sense for some beneficiaries. Others may benefit from continuing Trust protection.
Consider factors such as:
- Financial responsibility;
- Creditor concerns;
- Divorce exposure;
- Significant inheritances;
- Special needs;
- Financial exploitation; and
- Long-term wealth preservation.
Estate planning allows you to customize your approach rather than treating every beneficiary identically.
8. Review Your Real Estate
Retirement often brings changes involving real estate.
You may be planning to sell the family home, downsize, purchase a second home, spend part of the year in another state, or relocate entirely.
Review how each property is titled and how you want it handled after your death.
If you have a Revocable Living Trust, determine whether appropriate real estate has been properly transferred to it.
Owning property in more than one state can also create additional estate administration considerations, making advance planning particularly important.
9. Consider Your Digital Assets
Your estate includes more than physical property and traditional financial accounts.
Consider what should happen to your:
- Email accounts;
- Social media profiles;
- Cloud storage;
- Digital photographs;
- Cryptocurrency;
- Online financial accounts;
- Websites or domain names; and
- Other digital property.
Create an organized inventory and make sure the appropriate people have legal authority and practical information to address your digital assets when necessary.
Avoid putting sensitive passwords directly into your Will.
10. Organize Your Important Information
A well-drafted estate plan is much easier to administer when your loved ones can find what they need.
Consider organizing:
- Estate planning documents;
- Financial account information;
- Insurance policies;
- Real estate records;
- Tax information;
- Contact information for professional advisors;
- Business documents;
- Digital asset information; and
- Important personal instructions.
Make sure your Trustee, Personal Representative, or another trusted person knows where important documents are located.
Your family does not necessarily need access to everything today—but someone should know where to begin.
11. Think About Your Long-Term Legacy
Retirement provides an opportunity to think beyond the mechanics of transferring assets.
What do you ultimately want your wealth to accomplish?
You may want to:
- Provide financial security for your spouse;
- Help children or grandchildren;
- Fund education;
- Preserve family property;
- Support charitable organizations;
- Protect assets for future generations; or
- Create a combination of these goals.
Your estate plan can be designed around your priorities rather than simply dividing your assets among beneficiaries.
12. Schedule an Estate Plan Review
Perhaps the most important item on your checklist is simply making sure your estate plan has been reviewed.
Your financial advisor may help you determine whether you are financially prepared to retire. Your estate planning attorney can help make sure your legal plan is prepared for retirement too.
Bring your existing estate planning documents, information about your assets, current beneficiary designations, and any questions about changes you are considering.
A review can identify outdated provisions, funding issues, tax considerations, and planning opportunities before they become problems.
Retirement Is a New Chapter—Your Estate Plan Should Be Ready for It
You have spent decades preparing financially for retirement. Your estate plan deserves the same attention.
Reviewing your documents before retirement gives you the opportunity to make thoughtful decisions while you are healthy, engaged, and in control.
At Eastside Estate Planning, we help individuals and families throughout Bellevue, Kirkland, and the greater Seattle area create comprehensive estate plans that reflect their values, priorities, and wishes.
Whether retirement is approaching quickly or still a few years away, reviewing your estate plan now can help protect what you have built and provide greater clarity for the years ahead.
Contact us today to schedule your 15-minute consultation.
