Estate planning is an essential element for managing your property and assets. Having an estate plan can ensure an easy transfer of ownership of rights to property and different types of assets when you are incapacitated or dead.
As a result, you can ensure that your assets receive the right person and are protected from falling into the wrong hands. Hence, an estate plan is an important document that you should work on, regardless of how much property or assets you possess.
Interestingly, 6 out of 10 Americans don’t have a formal estate plan, meaning the risk of the property falling into the wrong hands is substantially large. But if you know which assets to cover in an estate plan, it can become much easier to draft a will and an estate plan for yourself.
What Should an Estate Plan Have
While creating a comprehensive estate plan is essential, it’s also a good idea to use innovative tools such as estate planning software to create your plan seamlessly. Once you have the resources, it’s time to consider what your estate plan should focus on.
Typically, a comprehensive estate plan must answer the following questions:
- What are your current assets?
- Who will be your beneficiaries?
- What’s your preferred asset distribution?
Additionally, estate plans outline the measures to address the needs of your loved ones after you’re gone. So, it would help if you also focused on the following critical questions:
- What type of medical care do you want to receive?
- Who will look after your dependents after you?
- Who will oversee decision-making for your financial and healthcare matters if you cannot make those decisions on your own?
Hence, you’re preparing a document for the most valuable assets of your life. Naturally, you must factor in trust, reliability, and intelligent decision-making to prepare a decent estate plan.
Assets to Include in Your Estate Plan
The types of assets can vary greatly. For example, there are tangible physical assets and intangible or digital assets. To ensure you cover everything, it’s essential to include all asset types. Generally, most property management consulting professionals recommend listing all your assets before drafting an estate plan.
1. Real Estate Property
Real estate is the first and the most prominent asset in an estate plan. Everything makes it to the real estate property list, whether you have rental property, land, shops, or houses. Moreover, make sure to include your current house in the list too.
Real estate property will be perhaps the most valued asset of all, so you must choose your immediate family members as the successor and inheritors for this property. However, US law allows individuals to designate real estate property to other companies, organizations, or non-profit organizations.
Jewelry may be more relevant to women, but it’s an essential asset to include in your estate plan. Traditionally, there is a sentimental aspect linked with jewelry. Therefore, owners are likely to give their jewelry to their loved ones.
However, many individuals invest in jewelry, meaning they would want a better monetary benefit from the precious metals and stones. So, if you own jewelry, clearly mention how much it goes to an individual or whether you want to give it during your life.
3. Bank Accounts
Bank accounts, savings, and digital wallets usually hold a decent monetary value. Therefore, mention these details in your estate plan to make it more comprehensive. At the same time, sharing account passwords with someone you trust is not a bad idea.
This way, you can ensure that your money doesn’t fall into the wrong hands, even if you forgot to draft an estate plan.
4. Digital Assets
Digital assets include intangible items like videos, photos, data, social media accounts, etc. It’s important to decide what happens to them once you’re gone. On some platforms, users have the option to create a legacy account.
The legacy contact allows another nominated user to handle your account after you’re gone. Finally, addressing the digital assets lets you control what happens to your data and critical digital information, so it’s a must-include in your estate plan.
5. Online Business Income
Online income channels like e-commerce stores, social media pages, YouTube earnings, etc., can be a continuous revenue-generating stream. So, it would help if you allocated someone you want to benefit from these account earnings.
Usually, it’s a good idea to share these streams with your family members to ensure a stable income after your departure. Moreover, you should mention who will run the business in your absence. This is a critical part, especially if you have multiple partners or investors in your business.
6. Sentimental Possessions
Sentimental possessions don’t necessarily have a high monetary value. However, mentioning sentimental possessions can prevent any risk of family conflicts after you have left. This is because sentimental possessions are close to the heart. For instance, your father may have a fountain pen or an old record player you love so much because of his connection with your father.
Therefore, items like these must be gifted in your presence to ensure better clarity.
In most states, pet trusts allow you to allocate some of your assets to a trust for effective pet care. You can designate a trustee as a caretaker. If pets are ignored in an estate plan, there are chances they might end up abandoned or in a shelter.
8. Arts and Antiques
Art and antiques can be valuable possessions, so mentioning the next inheritors of these items makes things a lot easier for your family and friends.
9. Personal Possessions
Some other personal possessions and assets to include in your estate plan are:
- Electronic Equipment
- Tech Gadgets
- Retirement Accounts, IRAs
- Debts and Loans
A comprehensive estate plan can relieve you from financial worries as you get old. When you establish an estate plan and your close ones know about it, things can become easier, and you should feel more relaxed about the security and protection of your assets and loved ones after you’re gone.
Now that you know which assets to include in your inheritance and estate plan, your financial planning for the future can become easier and more effective.