Why Smart Estate Planning Is About More Than Just Money

For the majority of individuals, estate planning is primarily associated with money and property. Examples may include: who gets the house, who receives the savings, and what happens to the investment portfolio? While the financial elements of estate planning are certainly important and valid, they represent only a portion of what truly represents comprehensive estate planning.

Many estate plans fail to incorporate an individual’s digital assets, which did not exist in generations past; an individual’s personal belongings with little to no dollar value but immense sentimental value; and an individual’s preference for the care of minor children, medical treatment, and end-of-life issues. All of these areas, although difficult to place within a standard “will,” can produce the same amount of conflict and confusion as a financial distribution.

The gap between what individuals believe is covered under an estate plan versus what is actually covered is typically not apparent until it is too late to correct. A family fights over grandma’s photo album or dad’s tools. No one can access critical accounts due to the lack of password information.

Siblings engage in custody battles over the guardianship of minor children because the parents failed to formally document their wishes. Critical medical decisions are made based on default laws rather than the preferences of the individual. In each case, the use of a broadened view of estate planning can help prevent the development of unnecessary conflict and confusion.

Your Digital Footprint: Does It Live On After Your Death?

Twenty years ago, estate planners did not have to consider a person’s email account, social media profile, cloud storage, cryptocurrency wallet, or subscription service. Today, these digital assets represent significant practical and sometimes financial value, yet few individuals include these in their estate planning documents.

Access to digital assets presents a challenge to the family of a deceased individual almost immediately after the individual’s death. Bank accounts and phone contracts present fewer challenges since there are well-established legal procedures to follow in regard to accessing and closing these accounts. However, what about the email account that contains years of vital communications?

The photo library located in the cloud? The social media profiles that contain memories and messages? Without login credentials and clear legal authority to access these accounts, families often face brick walls when attempting to access the information contained in the accounts or to close the accounts.

In addition to potential financial value, some digital assets have real monetary value. For example, cryptocurrency holdings, online businesses, domain names, digital creative works, and valuable gaming accounts require documentation and inclusion in an estate plan. However, as with other forms of non-traditional assets, individuals often do not consider these as “real” assets, similar to property or bank accounts.

While the solution is not complex, it will likely require an individual to think outside the traditional will-based structures. Individuals can seek professional guidance — attorneys who specialize in modern estate planning, including residents who can assist in developing methods to document digital assets and establishing the legal authority required to access and manage digital assets after death.

This includes developing and maintaining secure lists of accounts and login credentials, identifying digital executors, and establishing the proper legal authority to manage an individual’s online presence after death.

Personal Property That Has Greater Sentimental Value Than Dollar Value

When an executor is asked about the most difficult task they perform in relation to their duties as an executor, the response is often related to distributing personal property. This is not the distribution of the house — that is typically addressed in the will. Nor is this the distribution of the investment portfolio — that is also typically addressed in the will. The issue lies in the distribution of the everyday items, the collections, the family heirlooms, and the other objects with memories and stories tied to the deceased individual.

As previously mentioned, a wedding band with a possible value of $500 may become a focal point of a family argument because three siblings have strong emotional connections to the ring. Photo albums that have no monetary value become a source of conflict because multiple family members wish to retain the memories contained within the albums.

Tools and recipes and other items, such as grandfather’s medals from his military service, have no monetary value but possess great sentimental value. These items serve as a reminder of the individual who passed away, and when a will fails to specifically identify how these items should be distributed, family members are left to determine how the items should be divided. Unfortunately, these conversations do not always occur amicably.

Individuals typically assume that their family members will work together to distribute their personal effects in a reasonable manner. Unfortunately, this assumption is often incorrect. Grief, long-standing sibling rivalries, and differing ideas regarding fairness often contribute to the conversion of the distribution of personal effects into contentious family disputes.

Smart estate planning done with the help of an experienced will lawyers canberra provides solutions to these issues. It does not necessarily entail drafting a will that outlines every single item of personal property. Instead, smart estate planning involves documenting an individual’s wishes for the distribution of personal property of particular significance to them.

Additionally, smart estate planning entails creating a framework for the distribution of personal property. Ideally, smart estate planning involves holding conversations with family members prior to passing away regarding who wishes to receive specific items and why.

Deciding on Guardianship for Minor Children: An Issue That Cannot Wait

Both parents of minor children are aware that they should include the designation of a guardian in their wills. However, most individuals delay doing so because the mere thought of a scenario in which both parents are deceased is overwhelming. Ultimately, a tragic event occurs — a car accident or a sudden illness — and the minor children are left without a clear directive regarding who should care for them.

Although courts will appoint a guardian for minor children regardless of whether the parents have identified a guardian in their wills, the process of appointment is arduous and may not ultimately align with the parents’ wishes for their children’s care.

Other family members may file petitions to be appointed as guardians, resulting in costly and emotionally traumatic litigation for the already grief-stricken children. Alternatively, the court may assign a guardian that the parents would have preferred not to have been assigned, thereby placing the children in a placement that does not serve their best interests.

Designating a guardian is not merely a checklist type of exercise. Rather, it requires the consideration of numerous possible scenarios. Who would care for the minor children if only one parent were deceased? What if the first-choice guardian cannot or will not assume the responsibilities of caring for the children? Should the guardian of the children’s finances be the same person who serves as their physical guardian? What values and principles are most important in the upbringing of the children? How will educational decisions be made?

Each of these issues requires documentation, however, they are also greatly enhanced by the exchange of conversation. Requesting that another family member accept the responsibility of acting as a guardian of your children is a significant ask.

Therefore, the request should not come as a surprise to that family member. Further, the conversation may reveal practical concerns that influence the decision-making process, such as the guardian’s current family dynamics, their geographical proximity, and their ability to assume additional childcare responsibilities.

Medical and End-of-Life Decisions

Estate planning is generally focused upon what occurs after an individual’s death. However, important decisions must be made prior to death. What occurs if an individual becomes incapacitated, but has not yet died? Who will make medical decisions on behalf of the individual? Which medical treatments are permissible, and which are consistent with the individual’s values and preferences?

Advance health directives address these types of questions. However, many individuals do not create advance health directives, or do not adequately contemplate the various scenarios. Consequently, when the individual becomes incapacitated, family members must make difficult medical decisions without any clear guidance regarding what their loved one would have desired.

Or, in the worst-case scenario, family members may disagree regarding the appropriate course of action, and engage in costly and emotionally draining litigation regarding the medical care of the incapacitated individual.

Conversations regarding medical treatment preferences are uncomfortable. No individual desires to contemplate scenarios involving severe disabilities, terminal illnesses, or prolonged vegetative states. Nevertheless, having these conversations and providing written documentation of the discussions can prevent the necessity of family members guessing regarding what their loved one would have desired, or engaging in litigation with family members regarding the medical care of an incapacitated individual.