A World Financial Planning Day special post
Every year, the 6th of October is celebrated as World Financial Planning day. On this year’s celebrations, we bring to you an exclusive post on how including your Estate Plan to your Financial Planning is beneficial. As a bonus, we also tell you how managing your Digital Estates can help you financially.
In this post, you will learn:
- How Estate Planning plays a major role in your Financial Planning
- How a Digital Estate Plan helps in your Financial Planning
Creating a sturdy Financial Plan involves a lot more than just budgeting and saving money. Your Financial Plan must also include your Estate Plan – starting from Will and Trust to Health Care Directives.
You probably know about Financial Planning and Estate Planning. A Financial Plan can help you in drawing up a budget and saving up money. An Estate Plan can give you peace of mind, knowing the people you choose will be in charge of your Estate after you’re gone.
So, how does Estate Planning play a major role in your Financial Planning?
An Estate Plan is more than choosing a beneficiary to inherit your physical and tangible assets. In a comprehensive Estate Plan, you can designate whom you like to make financial and health care decisions on behalf of you, as well as specify the types of medical treatments and end-of-life treatments you would want to or do not want to have in case you become incapacitated.
By including details such as financial and health care decisions, your loved ones will appreciate not having to make difficult decisions during an already stressful period of their life.
Let us have a look at the types of documents that form a part of your Estate Plan.
- Wills and Trusts: A Will or Trust gives you a way to make your wishes known after your death. A Last Will and Testament allows you to appoint an Executor to handle your estate after your death. It also allows you to state to whom a certain piece property must go to. Without a Will, you will die intestate. This means your estates will be distributed as per the laws of your state and you have no control over who receives what part of your estate.
- Health Care Directive: An advanced healthcare directive gives you a chance to instruct your loved ones regarding the medical care you wish to receive in case of incapacitation. You can also include life-sustaining measures such as breathing and feeding tubes.
- Power of Attorney: A Power of Attorney (POA) gives someone of your choice the authority to handle your affairs. A POA gives someone the legal authority to take charge of your matters in case of your incapacitation. A Financial POA handles your financial matters while a healthcare POA will be in charge of your health care decisions.
- Life Insurance: A Life Insurance makes sure your loved ones are taken care of, after your death. Parents of minor children and homeowners should look into life insurance protection.
How does Digital Estate Planning help in Financial Planning?
You might own a Digital Asset of financial value. This can include Digital Art such as audio, video, paintings or stock photographs, Cryptocurrency, websites and social media sites that make money, third-party payment, online shopping and subscription.
If you are a social media influencer, you might be earning some amount through your social media sites. Similarly, if you own a website or a blog and have monetized it, you might be earning a considerable amount of money through it. How about online shops? Do you sell on eBay, Etsy or Amazon? These channels also form a part of your finances and must be included in your Digital Estate Plan along with details of the finances you receive through it.
If you have invested in Cryptocurrencies, make sure to include them in your Digital Estate Plan as well. Your loved ones cannot access or redeem your crypto wallet unless you find a way to provide them with your public and private crypto keys.
So, this World Financial Planning Day, take a decision to handle your finances by creating an Estate Plan and Digital Estate Plan.