When people think about estate planning, they often conjure images of wills and trusts, all aimed at specifying how assets will be distributed. While this is certainly a major component of the estate planning process, it isn’t everything. So, if you devote all of your estate planning attention to wills and trusts, you might be missing out on other opportunities or leaving yourself at risk. Here’s how.
The value of a power of attorney
If you look at statistics, you’ll find that your potential need for long-term care is pretty high. But along with that need for long-term care could come incapacity. Other unexpected life events can leave you unable to make important decisions, too. So, who is going to make important financial, legal and medical decisions on your behalf in the event that you become incapacitated? If you don’t specify, your financial future could be left in the hands of someone you don’t know.
If you want to ensure that it’s someone you trust making those decisions, you might want to create a power of attorney. This legal document transfers decision-making capabilities to a named individual, preferably someone who understands your priorities and knows how to act in your best interests. Just make sure that you revisit this document from time to time to ensure that you’ve still got the right person in place to act on your behalf should the need arise.
Using a health care directive
Incapacitation can also limit your ability to make important health-related decisions on your own behalf. This is where a health care directive can come into play. Like a power of attorney, this legal document authorizes a named individual to act on your behalf if you are suddenly unable to make important health-related decisions on your own.
Given the importance of these decisions, you should make sure you pick someone who understands what you want out of your health care and who you trust to act in accordance with your wishes. This directive can provide guidance, too, such as specifying when you do or do not want life-supporting care.
Other non-financial aspects of your estate plan
Although money and wealth are an important focus during the estate planning process, there’s so much more to you that shouldn’t go unaddressed. Therefore, as you start your estate plan, you might want to consider some of these non-financial elements that have shaped your life and your family:
- Personal legacy: Your personal beliefs and those that you’ve bestowed upon your children have shaped the world around you. You don’t want those values to be forgotten. This is where a personal legacy statement may come into play, where you remind everyone of who you are and what you believe, which may inspire your loved ones to follow in your footsteps.
- Family traditions: If there are key components to your family traditions, you might want to make sure that you leave behind whatever is necessary for your family to continue those traditions. So, carefully think through what your family might need in that regard.
- Digital assets: Your online accounts, including social media and picture sharing apps, can carry a lot of sentimental value. You should make sure that you address who will be able to access these accounts and what should be done with their content.
Is your estate plan complete?
If you’re worried that it’s not, you may want to consider reaching out to a legal team that’s well-versed in developing the comprehensive plan that you’re looking for. With this assistance, you’ll hopefully be able to rest easy knowing that your estate, your loved ones and your vision of the future is protected as fully as possible.