You work hard providing for your loved ones during your life. You can also provide for them when you are gone with a simple estate plan that legally conveys your desires to all your heirs. Here’s a short list of some of the basic documents you should consider including in your estate plan.
Information memo. Keep a list of your insurance policies, brokerage accounts, businesses you own, outstanding debt, credit cards, tax-related documents, and names and phone numbers of professional advisors in a single place that can be easily accessed. As time passes, review this document and update as necessary.
A will. Your will is a written document that gives your heirs the blueprint of your wishes and intentions. In your will, you may bequeath assets to your heirs, appoint an executor to distribute your assets, and designate a guardian for your minor children.
A durable power of attorney for finances. Designate in this document an individual or advisor to make financial decisions on your behalf if you become incapacitated. The individual you designate can sign checks if necessary. Also can be given access to your checking and investment accounts.
Medical directives. You name an individual to make health-care decisions for you in the event you become unable to make them yourself.
Funeral instructions. Detail what you feel is best in your specific situation. Include a list of relatives, friends, and business associates to be notified by your immediate heirs.
Taxes. Your estate plan should include provisions to minimize taxes if your estate might be subject to taxes at either the state or federal level.
Keep track of your digital assets during estate planning
An important step in estate planning is creating an inventory of your assets. Your executor, or the person you designate in your will to carry out your last wishes, uses the inventory to make sure all of your property passes to your heirs.
It’s likely that some of your assets exist in digital form. Documenting your digital assets along with your physical belongings can help ensure your final wishes are honored and your estate is administered correctly.
Here are a few items to keep in mind as you compile a list of your digital assets:
- Create a list of passwords. In order to review financial accounts with banks, brokerages or other businesses, your executor will need your current passwords. If you protect passwords with additional encrypted apps, include the master access info. Most importantly, keep your list updated when you change passwords.
- Be comprehensive. Add URLs, usernames and passwords for nonfinancial accounts (such as your email and online storage sites) to your inventory. Why? These accounts can be essential for retrieving invoices, statements and other paperwork for which you’ve chosen electronic-only delivery.
- Don’t forget device access. The physical assets you use to access your digital data include your phone, tablet and computer. That means your executor will need passwords and file names to access those devices. Also, list the location and encryption information for offsite or standalone storage devices, like external drives.
When it comes to planning, keeping track of your online assets can be vital.
If you have questions contact Deb at deb@cdtax.com and schedule a free consultation today.
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