Estate planning is the physician's first line of defense against wealth loss

Regarding your legacy, there’s a fine line between ensuring your wealth endures for generations and leaving behind a financial burden for your loved ones. Unless you have a solid estate plan, your wealth could be eroded by taxes, administrative fees or even disputes among heirs.

The first step in defending your wealth from unnecessary loss is to design an estate plan prioritizing protection over liability. Generally, most individuals’ idea of estate planning revolves around deciding who inherits what. On the contrary, it is about creating a structure that minimizes taxes, avoids probate complications and ensures your intentions are executed smoothly. This will help you to avoid using outdated methods that may cause you to lose more than you preserve.

To create a foolproof estate plan, avoid these common mistakes that lead to unintended consequences.

Failing to update your will

Life changes, and so should your will. Whether you are changing marital status, having a new child or acquiring a new asset, your estate plan should reflect your current situation. Regularly review and update your will to ensure no one is left out and that your assets are distributed according to your latest intentions.

Choosing the wrong executor or trustee

The individual you select as your executor or trustee is crucial in ensuring your estate plan is carried out. Choosing someone ill-equipped to handle these responsibilities can delay the process, bring about errors and even attract legal disputes. Ensure your executor is trustworthy and capable of managing the administrative tasks involved.

Ignoring digital assets

We live in a digital world where assets are not limited to physical possessions. Cryptocurrency, online accounts and intellectual property rights are all part of your digital footprint. Ensure these assets are included in your estate plan, and provide instructions on accessing them.

Inadequate distribution of assets

I am 100% confident that the primary cause of family disputes is unequal or inadequate asset distribution. To prevent this, ensure that your estate plan clearly outlines how assets, especially sentimental items like family heirlooms, should be distributed. Transparency in your intentions can help mitigate disagreements and ensure your wealth is transferred peacefully.

Estate planning 2.0

Estate planning creates a solid foundation for financial security, free from unnecessary complications; it does not have to revolve solely around safeguarding wealth for the future. From mobile applications to data analytics and digital wills, estate planning has become far more accessible, and you can take proactive steps to protect your assets anytime, anywhere.

Leverage technologies to keep a clear and accurate record of your assets, helping you avoid common mistakes in estate planning. This gives you peace of mind that your wealth will be passed on according to your wishes — without the stress of taxes, rising interest rates or family disputes. Ultimately, an estate plan that is well thought out and up to date protects your legacy from potential challenges and ensures your hard-earned wealth is not vulnerable to outside threats or unnecessary complications.

Howard Enders is COO of The Estate Registry.