Tax season has a way of bringing your financial life into sharp focus. You've just gathered your income statements, reviewed your assets, and taken a hard look at what you own and what you owe, which makes right now one of the most natural times of year to think about your estate plan. Whether you've never created one or it's been a few years since you last reviewed yours, the weeks following tax filing are a great window to make sure your plan still reflects your life and your wishes.
If you're ready to take the next step now, don't wait — reach out to our team by calling (385) 481-5276 or filling out our online contact form to schedule a free consultation.
Why Tax Season and Estate Planning Go Hand in Hand
There's a reason financial advisors and attorneys often bring up estate planning around this time of year. Tax documents paint a detailed picture of your financial situation — your income, your retirement accounts, your investments, and your property. All of that information is directly relevant to how your estate plan should be structured.
When you review your taxes, you're essentially reviewing your financial snapshot. That makes it easier to spot changes that might affect your plan, like a new asset, a shift in income, or a change in family circumstances. Instead of letting that information sit in a filing cabinet, you can put it to work by making sure your estate plan is up to date and working the way you intend.
Start by Reviewing Your Current Estate Plan
If you already have an estate plan in place, tax season is a good time to dust it off and give it a careful read. Life changes quickly, and a plan that made sense five years ago may no longer reflect your current situation.
Ask Yourself These Key Questions
Think about whether anything significant has changed since you last updated your documents. Common life events that may call for an estate plan update include:
- Marriage, divorce, or remarriage
- The birth or adoption of a child or grandchild
- The death of a named beneficiary or executor
- A major change in assets, such as buying or selling property
- A significant increase or decrease in income or retirement savings
- A move to a new state
- A change in your health or the health of a loved one
Even if none of these apply, reviewing your plan every three to five years is a good habit. Laws change, your priorities evolve, and your plan should keep pace with both.
After reviewing your list of life changes, compare them against your current documents to identify any gaps or outdated information. That comparison is often where the most important updates are uncovered.
Check Your Beneficiary Designations
One of the most overlooked aspects of estate planning is keeping beneficiary designations current. A beneficiary is the person or organization you've named to receive a specific asset — like a retirement account or life insurance policy — when you pass away.
Here's the important thing to know: beneficiary designations on accounts like IRAs and 401(k)s typically override what's written in your will. That means even if your will says one thing, the money in those accounts will go to whoever is listed as the beneficiary on the account itself. If that name is outdated — an ex-spouse, a deceased parent, or someone you no longer intend to include — the consequences can be significant and difficult for your family to sort out.
After filing your taxes, you'll have a clear picture of which retirement accounts and financial accounts you hold. Use that information to pull up the beneficiary designations on each one and confirm they still reflect your intentions.
Think About How Your Assets Are Titled
How you own something matters just as much as what you own. The way an asset is "titled" — meaning whose name is on it and in what capacity — determines how it's handled when you pass away.
For example, assets held jointly with a right of survivorship automatically pass to the surviving owner, regardless of what your will says. Assets held in your name alone may need to go through probate, which is the court-supervised process of distributing a deceased person's estate. Probate can be time-consuming and costly, and many families prefer to avoid it when possible.
A trust is one common way to hold assets outside of probate. When assets are placed in a trust, they're managed according to the terms you set during your lifetime, and they pass to your chosen beneficiaries without going through the court process. After tax season, when you have a full picture of what you own, it's worth reviewing how each asset is titled and whether any changes would better serve your goals.
Consider Whether a Trust Makes Sense for You
If you don't already have a trust as part of your estate plan, now might be a good time to consider whether one could benefit you. Trusts aren't just for wealthy families — they can be useful tools for anyone who wants more control over how their assets are distributed.
Some Situations Where a Trust May Be Worth Considering
There's no one-size-fits-all answer, but a trust may be worth exploring if:
- You want to provide for a minor child or grandchild without giving them direct access to a large sum of money at a young age
- You have a loved one with special needs who receives government benefits that could be affected by an inheritance
- You own real estate in more than one state and want to avoid multiple probate proceedings
- You want to provide for a surviving spouse while also ensuring certain assets eventually pass to your children
- You'd like to keep the details of your estate private, since probate records are generally public
These are just starting points. The right structure for your estate plan depends on your specific circumstances, and an attorney can help you think through your options clearly.
Review Your Powers of Attorney and Health Care Directives
Estate planning isn't only about what happens after you're gone — it's also about making sure the right people can act on your behalf if you become unable to make decisions for yourself.
A power of attorney is a legal document that authorizes someone you trust to manage financial matters on your behalf. A health care directive (sometimes called a living will or advance directive) outlines your wishes for medical treatment and names someone to make health care decisions if you can't. These documents are often created alongside a will or trust, but they're easy to overlook when life gets busy.
If you haven't created these documents, or if you have but haven't revisited them recently, tax season is a good reminder to do so. The person you named five or ten years ago may no longer be the right choice — and it's important that your wishes are clearly documented and current.
Don't Overlook Long-Term Care Planning
One thing tax season often brings to light is how much you've saved for retirement — and whether that savings would hold up against the potential cost of long-term care. Long-term care refers to ongoing assistance with daily activities due to aging, illness, or disability, often provided in a nursing home or assisted living facility.
The costs associated with long-term care can be significant, and many people are surprised to learn that standard health insurance doesn't typically cover these expenses. Medicaid — a government program that helps cover medical costs for those who qualify — can help, but qualifying often requires careful planning well in advance.
If protecting your savings and your home while planning for the possibility of future care needs is something you're thinking about, this is an important part of the estate planning conversation to have sooner rather than later.
Start Working on Your Estate Plan With Sandberg, Stettler, & White
Tax season gives you a rare, clear view of your financial picture. Taking a few intentional steps while that information is fresh can make a meaningful difference for you and the people you care about. Whether you're starting from scratch or revisiting a plan you created years ago, small updates made today can prevent much larger headaches down the road.
At Sandberg, Stettler, & White, our team is here to listen, answer your questions honestly, and help you put a plan in place that reflects your values and your life — not a one-size-fits-all template. We offer free consultations, available in person or virtually, so you can take this next step in whatever way works best for you.
Call us at (385) 481-5276 or reach out through our online contact form to schedule your free consultation. We'd be glad to walk with you through this process.