A lot of people think that estate planning is nothing more than writing down on a piece of paper who they want to inherit their assets. While that is part of the estate planning process in a nutshell, the intricacies of it all can be much more nuanced than that. And if you oversimplify the process, you could miss out on crucial estate planning opportunities that would prove advantageous to you, your estate, and your loved ones.
That’s why it’s important that you don’t rush the creation of your estate plan or throw together a plan in a slipshod way. Instead, exercise care and establish your plan with a full understanding of what the process can do for you.
To show you the importance of taking the time needed to create a holistic estate plan, let’s look at some commonly overlooked aspects of the estate planning process. That way you’ll know where you’ll need to devote a little more attention as you navigate your plan.
Often overlooked aspects of estate planning
Believe it or not, there’s a lot that goes into an effective estate plan. But people overlook key aspects of the process all the time, thereby putting their estate and their loved ones at risk of something that’s unintended. Here are some of those issues that are sometimes dangerously glazed over in the estate planning process:
- Asset inventory: If you’re leaving your assets to multiple people, then you need to have a full understanding of the nature and extent of your assets. If you don’t, then some of your assets may end up being subjected to intestate succession, where state law specifies who inherits them. This could be contrary to your wishes, so make sure you have a full listing of your assets so that you can address them all in your estate plan.
- Your healthcare and financial decisions: No one ever expects to become incapacitated. But it happens all the time. If you don’t have proper documentation in place, such as a power of attorney or a healthcare directive, then someone you don’t know and don’t trust could be appointed to make financial and health decisions for you. That could be bad news for you and your estate.
- Digital assets: You probably have a larger online presence than you think. Photo banks, documents stored in the cloud, email accounts, and social media accounts can all be valuable to your loved ones. If you don’t address these assets in your estate plan, then your family may be unable to access them, essentially rendering them lost.
- Estate plan modifications: You might feel a sense of relief after completing your initial estate plan, but you have to revisit it periodically to ensure it still meets your needs. Otherwise, the death, birth, or divorce of a loved one could change the dynamics of your distribution scheme without you even realizing it. You should also revisit and potentially modify your estate plan if you acquire a large asset, or if you have a falling out with one of your named beneficiaries.
Create the holistic estate plan you need
You don’t want to create an ineffective estate plan, as doing so puts you, your assets, and your loved ones at risk of an outcome that you don’t want. So, take the time needed to learn about your estate planning options so that you can choose those that are best suited to bring your vision of the future into reality.