Four Overlooked Elements in Estate Plans
When creating an estate plan, there are details which seem minor but are actually very important. It is helpful, when creating an estate plan or reviewing your existing one, to check for these key estate plan elements, says a recent article from mondaq, “Four Provisions People Often Forget To Include In Their Estate Plan.”
Don’t forget to name alternative beneficiaries and fiduciaries. If the estate plan names a beneficiary, but they are unable to take possession of the property, or they are deceased, the asset may go to someone untended, or even as though you have no estate plan at all. In other words, the state will determine who receives the property, which may not be in accordance with your wishes. If there’s an alternate beneficiary, the property will go to someone of your choosing. Back-up fiduciaries (executors, trustees, agents under a power of attorney and so on) are also critical. If your primary choice can’t or won’t serve, someone unintended, or undesirable, may have to do it.
I find in initial consultations this is one of the biggest issues to discuss. Clients consider their estate plan based upon present circumstances, but real life doesn’t always go the way we expect, so it is important to plan for contingencies.
Personal possessions, including family heirlooms. In the past, many families had items with great sentimental value, whether or not they have any financial value. Although this tends to be less common now, it is important to consider who would get those types of items. It’s often best to have a personal property memorandum, which our firm routinely creates in our client’s estate plans. This is a separate document providing details about what items you want to give to family and friends. These work differently in different states, so a local estate planning attorney will know the law for your state and can advise appropriately. Even if this document is not legally binding, it gives your heirs clear instructions for what you want and may avoid family arguments.
I ask about important, sentimental possession in consultations, and clients often respond by saying these items aren’t financially valuable, as though that means they shouldn’t be consider. But, these are the items that lead to fights in estates because they have an emotional impact on who receives them, and more significantly, who doesn’t. I had an estate litigation case years ago that didn’t settle over a $600 wardrobe. The financial value of planning was proven.
As a final thought, please don’t use the personal property memorandum to make any financial bequests or real estate gifts or use it as use it to try to amend the estate plan. It never works well, and can break your estate plan.
Digital assets. Much of our lives is now online. However, many people have slowly incorporated digital assets into their estate plans. You’ll want to consider all online accounts, including email, financial, social media, gaming, shopping, etc. In addition, your fiduciaries will need appropriate access to your phone, accounts and devices. The agent named by your Power of Attorney needs to be given authority to handle online accounts with a specific provision in these documents, which we do. Ensure the information, including the accounts, account number, username, password and other access information, is kept safe, and tell your fiduciaries where it can be found.
This is a growing need in today’s digital society. So, you can learn more in this article: https://galligan-law.com/does-your-estate-plan-include-digital-property/
Animals. Today’s pet is a family member but is often left unprotected when its owners die or become incapacitated. Pets cannot inherit property, but you can name a caretaker and set aside funds for maintenance. Many states now permit pet owners to have a pet trust, a legally enforceable trust so the trustee may pay the pet’s caregiver for your pet’s needs, including veterinarian care, training, boarding, food and whatever the pet needs. Creating a document providing details or speaking to the caretaker concerning the pet’s needs, health conditions, habits and quirks is advised. Make sure the person you are naming as a caretaker is able and willing to serve in this capacity, and as always, when naming a person for any role, have at least one backup person named.
Checking for these four key estate plan elements will help ensure your estate plan works as intended and to the benefit of your loved ones.
Reference: mondaq (March 16, 2023) “Four Provisions People Often Forget To Include In Their Estate Plan”
