Estate planning is about more than just writing a will. It is about making sure your personal items and assets go where you want them to after your death.
However, you may forget some important things when you plan your estate, and that can cause problems later on.
Identifying and valuing all assets
One commonly overlooked step in estate planning is thoroughly identifying and valuing all your assets. You may forget to include certain assets such as digital assets, intellectual property or items held in trust. Accurately assessing the value of these assets ensures you can correctly account for them in the distribution process.
Designating the right beneficiaries
Brushing up on who you picked as your beneficiaries from time to time is another important yet sometimes neglected aspect of estate planning. Retirement accounts or life insurance policies let you choose a person to get the money when you die. If you forget to update these choices as you experience life changes, your personal items might not go to the right people.
Planning for incapacity
You may get sick or hurt and can not make decisions for yourself. Planning for this scenario ahead of time can help. You can give someone you trust the power to make choices about your health and money in your estate plan if you cannot take care of yourself. If you do not do this, your loved ones might have a hard time helping you when you need it most.
Considering tax implications
Taxes can eat up a lot of the money you want to leave to your loved ones. Forgetting about taxes can mean less money for the people you care about. Planning ahead and setting up trusts or giving gifts while you are alive can help reduce how much gets taken out in taxes.
Updating your plan regularly
Lastly, you may overlook the importance of regularly updating your estate plan. Life events such as marriage, birth of children or changes in financial circumstances can make existing plans outdated or ineffective. Reviewing and updating your estate plan ensures it remains aligned with your current wishes and circumstances.
Estate planning is a process that requires careful consideration and attention to detail. By remembering these important steps and staying on top of your plan, you can make sure people follow your true wishes after you die.