3 Questions Every CEO Should Ask About Estate Planning

Have you updated your will in the past five years? Are your beneficiary designations up to date? Do your loved ones know how to access important documents and account information if they need to?

We all should be able to answer yes to these questions, but many executives cant and getting to yes and making sure your estate plan is in good order is critical, especially as recent Washington legislation adds additional control and nuance to your planning that differs from other states.

Here are the top three questions to consider as you begin to make or update your plans as a Washington resident.

1. Is your estate plan up to date?

It is usually good practice to review the wills of you and your spouse, and other estate planning documents, at least every five years. Its also smart to do this after major life events or significant changes in net worth welcoming a new child or settling an inheritance. Estate tax exemption is one area where Washington differs from national benchmarks, with the states exemption set at about $2.13 million per person compared to the federal exemption of $5.49 million per person as of January 1, 2017. Washington estates exceeding this amount are subject to a graduated state estate tax in the range of 10 percent to 20 percent. If your estate is larger than the Washington exemption, your estate plan can be structured to optimize for state and federal estate tax exemptions. Additionally, it may be advantageous to make lifetime gifts to work toward the goal of reducing the size of your estate below the Washington estate tax exemption level. This can also be a good time to review if you own any out-of-state real estate or tangible personal property. Depending on your circumstance, it may be advantageous to own these assets in entities such as LLCs or revocable trusts.

2. Do you have key documents in place and up to date?

These documents should always reflect your current wishes and situation: living will, health care power of attorney, financial power of attorney, HIPAA (Health Insurance Portability and Accountability Act) release authorization and family tree. The new Washington Power of Attorney Act took effect on January 1, 2017, and incorporates changes, including clarifying the duties of an agent, revoking a spouses appointment as agent upon filing a petition to dissolve a marriage (rather than upon a final divorce decree) and changing the gifting authority of the agent. Under the new act, your estate planning documents can also specify how you would like your digital assets to be treated. Apart from the act, you should also consider executing a financial power of attorney, health care power of attorney and a HIPAA release for your children as they reach 18, as being designated an agent in these documents will ensure your ability to make key medical and financial decisions for them should an issue arise.

3. Have you shared the logins and passwords for your accounts so they can be retrieved as necessary?

In 2016, Washington passed the Digital Assets Act, which permits you to designate a fiduciary to access your digital assets including email, photos and social networking accounts. The act also allows you to restrict access to your digital accounts or have them deleted upon your death.

In addition to these state-specific topics, you should be thoughtful about more general concerns, ranging from lining up all your important advisers to making decisions about your memorial services. In the end, the most important step in estate planning boils down to having a plan it will help unlock the true value of your wealth during your lifetime and secure your legacy beyond.

LAUREN ANDERSON is a wealth adviser at J.P. Morgan Private Bank in Seattle. Reach her at [email protected].