What are the Estate Planning Basics?

Estate Planning Basics
Estate planning is a term generally applied to the steps taken to create a roadmap for a person’s assets when they die or become incapacitated.

When it comes to planning for the future, one of the most significant things you can do is to create an estate plan. The Seattle Times’ recent article “Basics of estate planning and your digital assets” says that estate planning has changed over the years, with the advent of digital assets. The article says that by understanding the basics of estate planning and incorporating digital assets into your plans, you can effectively manage where your assets end up after you pass away. An estate plan creates a clear, actionable path forward for your family, so your assets can be disseminated according to your wishes. An estate plan also provides your family with a sense of security because they know they will be taken care of after you are gone.

An estate plan includes creating a will that outlines which assets should go to which relatives, what nonprofit donations will be made and how estate taxes should be settled, among other things. First, you can take an inventory of your assets, including real estate, property like cars or collectibles, bank accounts, life insurance policies and investments. Next, consider your priorities for protecting and caring for your family, if something happens to you.

With so much online, it is very important to include digital assets in your estate plans. These assets include your financial accounts, movies, music, photographs and cryptocurrency. These can and should be included in your estate plans, if you value them and want your family to be able to access them after you are gone.

Just like your physical assets, first you should take an inventory of your digital assets, including making a list of your login information and passwords. It is also important to include notes about what you would like to have done with these accounts, whether that means transferring them to another person, closing them, or some other action. For more complicated assets like cryptocurrency, you must keep records stating what you own and how it can be accessed because cryptocurrency often does not come with a paper trail like a regular bank account.

It is a prudent and worthwhile exercise to plan the ways in which your assets will be handled after your death. This is for both your own peace of mind and your family’s future security.

Making sure to include your digital assets will allow your heirs to fulfill your final wishes in all matters. Begin the process with a few basic steps to give those around you a clear path forward, after you are no longer with them. Contact your estate planning attorney today!

Reference: Seattle Times (Jan. 31, 2022) “Basics of estate planning and your digital assets”