As 2025 draws to a close, it’s the perfect time to assess and finalize your estate planning. Many people focus on setting financial goals for the new year, but one area that is often overlooked is updating an estate plan. Estate planning is not just about having a will in place; it’s about ensuring that your final wishes are honored, minimizing any potential tax burdens, and safeguarding your loved ones. A comprehensive estate plan also covers areas such as incapacity and healthcare decisions, making it an essential part of your financial strategy. Now is the time to review your estate plan, ensuring that your goals are clearly outlined and aligned with your current circumstances before the year ends. By taking these proactive steps, you can enter 2026 with peace of mind, knowing your estate is properly planned.
Review Your Will and Trusts 
Your will and trusts are the foundation of your estate plan. They outline how your assets will be distributed when you pass away and designate who will take care of those affairs. As your life evolves, your estate plan should evolve with it. It’s important to ensure that your will still reflects your current wishes and circumstances. Start by reviewing the list of beneficiaries in your will. Life events such as marriages, divorces, births, or deaths could mean that certain beneficiaries need to be added, removed, or adjusted. This is also a good time to assess the person or people you have designated as your executor or trustee. These individuals will carry out your wishes, and their responsibilities can be complex. If your situation has changed, or if you’ve experienced shifts in relationships, it’s important to ensure these roles are filled by individuals who are still capable and willing to serve.
If you have established any trusts, now is the time to review their provisions. Whether you have a revocable living trust, a special needs trust, or any other type of trust, ensure that the terms are still relevant. For instance, check whether the beneficiaries are accurate, whether assets are titled correctly in the trust, and whether the trust structure still aligns with your long-term financial goals. By reviewing and updating your will and trusts before 2026, you ensure that your wishes are clearly outlined and that any changes in your life are reflected.
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Examine Your Powers of Attorney and Healthcare Directives
While many people focus on distributing assets, one area often overlooked in estate planning is planning for the possibility of incapacitation. A power of attorney (POA) allows someone you trust to make financial decisions on your behalf if you become incapacitated. Similarly, a healthcare power of attorney designates a person to make medical decisions for you if you are unable to do so yourself. Both of these documents are essential to ensuring that someone can step in to manage your affairs in a crisis. Just as with your will, it’s crucial to review your powers of attorney periodically to ensure that the people you’ve appointed are still the right individuals for the job.
In addition to reviewing your POA documents, it’s also important to update your healthcare directives. These directives can include a living will, which outlines your preferences for medical treatment, end-of-life care, and life-sustaining measures. It’s worth revisiting these documents to ensure your healthcare wishes are still consistent with your values. Life circumstances, health changes, and shifts in personal preferences can all affect these decisions, and as a result, it’s wise to check that the people you’ve designated to make medical decisions on your behalf still align with your current preferences.
Tax Planning: A Critical Component of Estate Strategy
Effective estate planning often involves minimizing the tax burdens on your estate, ensuring that as much of your wealth as possible passes on to your loved ones. One way to reduce taxes is by utilizing annual gift exclusions. For 2025, you can gift up to $17,000 to any individual without incurring gift taxes. Taking advantage of this gift exclusion can help reduce the size of your taxable estate. Additionally, if you’ve been considering making larger gifts to family members or charitable organizations, now is a good time to do so. Year-end gifting can be an effective way to transfer wealth while minimizing estate taxes.
Charitable giving is another powerful tool in reducing estate taxes. If you have a favorite cause or charity, consider making a donation before the year ends. Gifts to qualified charities are tax-deductible and can significantly reduce your taxable estate. If you haven’t already, consult with your estate planning attorney to see if setting up a charitable trust, such as a charitable remainder trust, would align with your overall tax and financial goals. This can provide you with immediate benefits, reduce your taxable estate, and benefit a charity you care about.
Life Insurance: Ensure Coverage Is Adequate
Life insurance is often a cornerstone of many estate plans, providing financial security for loved ones after your passing. As you review your estate plan, it’s essential to assess whether your life insurance coverage is still sufficient. If your circumstances have changed—whether through the purchase of new property, changes in your family’s financial needs, or an increase in liabilities—you may need to adjust your policy. Life insurance can help ensure that your loved ones are not burdened with estate taxes or other financial challenges after you pass away.
Don’t forget to review the beneficiaries listed on your life insurance policies. If there have been changes in your family structure, your beneficiary designations should reflect those changes. The beneficiary designation on a life insurance policy overrides the instructions in your will, so it’s important to keep those up to date as well. Make sure that your coverage levels are adequate to cover your estate’s taxes, outstanding debts, and provide for the future financial needs of your family.
Organize Your Important Documents
While it’s essential to ensure that your estate plan reflects your current wishes, it’s equally important to organize your documents in a way that makes them accessible when needed. After all, your estate planning efforts will only be as effective as your ability to execute them. Take inventory of your digital and physical assets, including your bank accounts, real estate, retirement funds, insurance policies, and legal documents. Creating a digital inventory of these items can ensure that nothing is overlooked and that your loved ones know where to look if they need to access this information.
Organizing your legal documents is also vital. This includes your will, trusts, power of attorney, healthcare directives, and life insurance policies. Store these documents in a safe place, such as a fireproof safe or with a trusted attorney or financial institution. Make sure that someone you trust knows how to access them. Having these documents organized and accessible will help prevent unnecessary confusion or delays when the time comes for your executor or trustee to carry out your wishes.
Plan for Long-Term Care
Long-term care is a reality for many people as they age. It’s important to plan for this possibility, whether through long-term care insurance or Medicaid planning. If you already have long-term care insurance, review the policy to ensure it will meet your needs in the future. Many people find that the cost of long-term care can quickly deplete their assets, making it necessary to create a plan to protect those assets.
If you are concerned about the possibility of needing long-term care but don’t have insurance, it’s worth considering Medicaid planning. Medicaid can help pay for long-term care costs, but there are strict eligibility requirements. Consulting with an estate planning attorney who is experienced in Medicaid planning can help you protect your estate while ensuring that you receive the care you need.
Consult with Your Estate Planning Attorney
While this checklist provides an excellent starting point, consulting with an experienced estate planning attorney is essential. Laws surrounding estate planning, tax strategies, and Medicaid planning are constantly changing. An attorney can help you navigate these changes, ensuring that your estate plan is as effective as possible. They can also review your documents to ensure that they comply with current laws and that your strategy is still aligned with your long-term goals.
Estate planning is a complex process, and an attorney can help you make adjustments to your will, trusts, and other documents to better reflect your wishes. Working with an attorney ensures that your estate plan is comprehensive and legally sound, providing you with confidence as you finalize your preparations for the new year.
By taking the time to review and finalize your estate plan before 2026, you’re ensuring that your wishes will be carried out and that your loved ones will be provided for. An up-to-date estate plan helps avoid confusion, minimizes taxes, and ensures that your family is cared for during a difficult time. If you’re ready to make sure your estate plan is in order for the new year, contact Gibson & Perkins, PC, today. Our experienced attorneys are here to guide you through the process and help you create a comprehensive, customized estate plan that meets your needs.