For many, developing a comprehensive estate plan can be a challenging prospect. Not only are people required to come to terms with their own mortality, but they must catalog their assets and distribute them among their surviving heirs. While it might seem like a mentally arduous task, finishing it leads to the comfort and peace of mind knowing your end of life decisions will be honored.
Unfortunately, there are numerous common factors that get forgotten when drafting a will, trust or powers of attorney, including:
- Digital assets: While physical property is given the most importance in an estate plan, it is also wise to consider the distribution of digital assets. This online property can include a digital entertainment collection of books, music or movies, a digital storefront like Facebook Marketplace or eBay, or your online shopper rewards. Even though they do not have a tangible counterpart, these assets could represent thousands of dollars in value.
- Sentimental property: Most people will focus on the bigger items such as a house, car, boat or even the family business when drafting their estate plan. It might be wise to take a careful look at your belongings for sentimental property. A paperweight that represents time spent with a favorite nephew or the flag that was used in your grandfather’s military funeral could be things to be handed down specifically rather than allowing them to be included in an estate sale.
- Secondary beneficiaries: While most people focus on determining who gets what when in the will, they might forget to consider secondary beneficiaries. In some situations, the heir cannot be located, or the heir has died, or the heir declines the inheritance. Rather than add time and cost to the process, it could be wise to include secondary beneficiaries for when the primary does not work.
- Ancillary costs: It is wise to consider any heirs or loved ones living abroad or in other parts of the country. Travel expenses or shipping costs for inherited items could be handled by the estate. If this is how you would like these expenses handled, it is wise to make mention of it in the estate plan itself.
- Failing to update: While many people consider an estate plan a one-and-done proposition, the truth is that the plan should be reviewed and updated on a regular basis. Outside of significant life events such as a change in marital status or the birth of a new child, most experts suggest that the plan should be reviewed every three to five years simply to ensure the documents still reflect your desires. Has a beneficiary fallen out of favor? Has your power of attorney proxy decided that she no longer wants the responsibility? These changes should be made immediately.
It is important to take your time and carefully consider every aspect of your estate plan as it’s being drafted. Additionally, do not hesitate to make changes when necessary.