When it comes to their estate plan, some people only think about their will. It’s true that a will is a key component of your estate plan. Just because you have a will in place doesn’t mean that your estate plan is complete.
There are a number of considerations that are forgotten about when people put together their estate plan. Here are three commonly overlooked estate planning components you may want in your plan.
Incapacity planning
As we get older, the chances that we’ll become incapacitated continue to increase. Many people aren’t putting the protections in place to prepare for the possibility of becoming incapacitated. One recent study found that only 42% of Americans have a health care planning document in an estate plan.
Two primary documents that can help protect you if you become incapacitated are a living will and a power of attorney. A living will allows you to stipulate which types of medical care you do and don’t want to receive. A power of attorney form allows you to name someone to make health care decisions for you if you are unable to do so.
Planning for digital assets
From music libraries to mobile banking, our personal and financial lives are becoming more and more digitized. Many estate plans are simply not equipped to deal with these digital assets effectively. Have an inventory of passwords and accounts that your loved ones can access after you pass. If your devices are locked with a pin, those numbers should be noted, too. Backing up your files to an external hard drive can help you keep all of your computer files together in one place.
Periodic reviews
It’s not enough to create a complete estate plan, although that’s a great start. It’s also important to check in on your estate plan on a regular basis. Review your estate plan after every major life event. If no major life events occur, it’s still good to look over your estate plan every 3-5 years to ensure everything is still up to date.
Estate planning can be an uncomfortable topic for people to think about. Having a complete estate plan in place will allow you to ensure your wishes are met and provide you with greater peace of mind.