When you think of estate planning, material possessions and financial assets such as houses, vehicles, bank accounts, and life insurance policies probably come to mind. But did you know that the most valuable piece of real estate you own is your mind?
While the protection of material belongings and finances is a major component of estate planning, one’s mental wellbeing is equally – if not more – important. Here are 3 reasons why:
#1 You must be “of sound mind” to execute a will.
In order to execute a will, you must be “of sound mind” in the eyes of the law. This means that you must have the mental capacity to make a valid will. You must understand what a will is, what it accomplishes, the relationship between yourself and those included in your will, and what property you own.
If there is any indication that you were not “of sound mind” at the time the will was executed, the will is at risk of being contested. This means that the court will be asked to determine whether the will is valid. If the will is invalidated, the assets will be subject to intestate distribution, that is, the court will determine how they will be divided and distributed.
#2 Planning while in crisis mode poses serious risks.
If you believe you meet all of the aforementioned requirements for being “of sound mind,” you’re probably thinking that you’re good to go. Not so fast. Being of sound mind is more than just knowing the purpose of a will and that you are making one. Rather, it involves having a clear understanding of your current situation and life circumstances and the proper head space to make rational decisions about what you want to happen to your belongings when you’re no longer here.
If you’re creating your estate plan during a time of crisis, your capacity to see the full picture and make rational decisions about your future and that of your family will be diminished. As a result, you may be at risk of ending up with a “rush job” estate plan that is neither comprehensive nor an accurate representation of your values and final wishes.
#3 Estate planning should be preventative, not reactionary.
Estate planning should not be used to react to life’s “what ifs.” Instead, the goal of your estate plan should be to protect yourself, your loved ones, and your assets before anything happens. After all, the purpose of estate planning documents like a will, advance medical directive, and financial power of attorney is to provide you with peace of mind, not to pick up the pieces after the unthinkable happens.
To recap, three reasons why mental health is important to estate planning are: (1) you must be “of sound mind” to execute a will, (2) planning while in crisis mode poses serious risks, and (3) estate planning should be preventative, not reactionary. Because there are so many important decisions that you’ll need to make when creating an estate planning strategy, practicing good mental hygiene is essential. For a deeper discussion about the importance of mental health in estate planning, you are invited to view Attorney Smith’s interview with Dr. Paula Anderson, Licensed Clinical Counselor and Organizational Psychologist. You can access the video here.