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When it comes to estate planning, you may start with the basics: writing a will, naming beneficiaries, and choosing an executor. While these steps are certainly important, they're just the beginning. Here are a few often-overlooked steps that go beyond the basics to consider including in your estate plan.
Overlooked Estate Planning Steps
Add a personal touch with a letter of intent:
Not everything that matters in your estate plan can be captured in a legal document. While it's not legally binding like a will or trust, a letter of intent can help explain your intentions, values, wishes, and the why behind your decisions. This letter can help reduce confusion, clear up questions, and avoid misunderstandings with your loved ones after you're gone.
Note: Remember that a letter of intent isn't a replacement for legal planning, but it can be a powerful companion.
Help avoid hard feelings with a personal property memorandum (PPM):
While the house, bank accounts and investments get most of the attention in estate planning, sometimes it's the smaller, more personal items that carry the most sentimental value. A PPM is a separate document, referenced in your will, that lets you spell out exactly who should receive which specific personal belongings, such as jewelry, furniture, family heirlooms, or even everyday items with emotional meaning.
Note: You can update a PPM anytime without having to go through the formal process of amending your will. Remember though that to be enforceable, your PPM must be mentioned in your will.
Plan for What-Ifs using powers of attorney (POA):
Estate planning isn't just about what happens when you're gone. It's also about when you're still alive but can't manage your own affairs. Having powers of attorney in place means someone you trust can step in and handle finances, pay bills, talk to doctors, and make important calls if you can’t. Without those documents, even your closest family members might need to go to court just to help you.
Note: Some banks, hospitals and other institutions may reject POAs that are several years old or don't meet their internal requirements, even if the POA is otherwise legally valid. Consider updating your POA every few years and check with your bank, hospital, and other organizations to ensure they'll honor it.
Other Overlooked Estate Planning Tips
Plan for your pets (legally):
Don't assume someone will just take them. You can designate a caregiver and even create a pet trust to fund their care. This can be important if you own an expensive or long-lived animal like horses, parrots, or exotic pets.
Think ahead about guns and collectibles: Heirs sometimes accidentally break the law when dealing with firearms, antiques, or rare items that might require special handling. For example, transferring guns may involve federal or state restrictions, while collectibles might need appraisals and specific care instructions.
Fund your trusts (yes, people sometimes forget): Creating a trust is great, but if you don’t actually transfer assets into it, it’s a fancy binder with no teeth. Make sure property deeds, accounts, and other assets are retitled in the trust’s name.
Name a backup for everything: Executor, trustee, power of attorney, healthcare proxy – have backups for everyone, and sometimes a backup for the backup. People move, fall out of touch, get sick, or pass away. If your primary point person is unavailable, it's likely everything gets delayed or challenged.
Help your heirs avoid a tax surprise: Even if your estate won't owe estate taxes, your heirs may still owe income or inheritance taxes on certain assets. Planning for how assets are taxed when inherited by your heirs is just as important as who gets them.
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