The top reasons people don’t have an estate plan may sound familiar to you. Here’s what they are and what’s at stake.
By: Jedediah McClure, JD
We all lead busy lives. Our children, significant others, parents, co-workers, and many others place demands on our time, barely leaving us time to do the things that we want to do, much less those things that we should do.
Common Estate Planning Excuses
In my years of practice, I’ve encountered many clients who have delayed or neglected their estate planning for various reasons. Often, these excuses can lead to significant complications and costs down the line. Here are the most common justifications I hear for postponing estate planning, along with explanations of why they fall short.
1. “I don’t have much, and my family knows what I want to happen to my assets.”
If you don’t have an estate plan, the state where you reside at your death has a plan for you. Every state has default legal rules for administering the estate of a person who has made no other plans.
- Intestate Succession: If you are married, these rules generally pass all or most of your assets to your surviving spouse, provided that your children are also your spouse’s children. If you are not married and have no children, then your parents may receive your estate. This can disrupt any benefits planning or other estate or disability planning that they may have undertaken. If your parents are no longer living, then your brothers or sisters, nieces, and nephews are generally next in the line of succession in most states.
- Judicial Distribution: Without a will, you allow a judge who doesn’t know you to apply the law and distribute the assets that you have worked for in a way that you may not want. At a minimum, you should consult with an attorney in your state to confirm that your state’s plan is compatible with your wishes.
2. “Consulting with an attorney will cost money that I would rather give to my family, spend now, or invest for the future.”
- Probate Costs: The law in many states allows for the executor of an estate and their attorney to charge as much as 2% of the value of all the estate assets as a fee. A typical probate estate valued at $300,000 — consisting of a house, car, and bank account — could generate more than $6,000 in fees and court costs. If your plan keeps a certain amount of your assets outside of probate, these statutory costs may be reduced or eliminated.
- Disabled Heirs: If any of your heirs are presently disabled, or may later become disabled and wish to apply for any government benefits to assist with their care, the lack of effective planning may force your loved ones to spend money they receive from your estate on their basic needs rather than on special things that might add to the comfort of their lives. Spending a little on your planning today can add significant value for your heirs later.
3. “I don’t care what happens to my assets because I’ll be dead.”
- Beyond Asset Transfer: Your estate plan is not limited to the transfer of assets at your death. Revocable living trusts are a valuable estate planning tool that can provide protection if you are ever unable to pay your bills and manage your affairs due to the natural aging process, illness, or an accident.
- Trust Management: It is quite common for a person to serve as trustee of their fully revocable trust, tending to their own affairs as they do now. If the creator of the trust is no longer able to manage their accounts and pay bills, a family member, trusted adviser, or a bank or trust company can step in without interruption. Without any planning, it may be necessary to incur the time and expense of asking a court to appoint a person to accept this responsibility. A trust also allows for the efficient distribution of your assets following your death, either outright or in further trust for your heirs, without incurring the time and expense of any court involvement.
4. “I will never die, and I will always be mentally sharp.”
If this is the case, you’re right — you don’t need an estate plan!
- Facing Reality: Most people are too busy enjoying their lives to think about the possibility of losing their physical or mental capacity or their eventual demise. This is understandable but ignores the inevitable. Most attorneys and financial advisers welcome a conversation about planning techniques to ease any future hardship on you and your family that may be caused by your death or disability. You should have that conversation sooner rather than later because you’re worth it, and so are your loved ones.
Take Action Today
Creating an effective estate plan is a complex process that requires professional guidance. As an estate planning attorney, I am here to help you navigate this journey and ensure your wishes are honored.
If you need assistance with your estate planning or have any questions about what to include in your Will, contact me today. At Supernus Law, we specialize in creating comprehensive estate plans tailored to your unique needs. Schedule a consultation with me, Jedediah McClure, and take the first step towards securing your legacy and protecting your loved ones.
Contact Information:
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- Website: Supernus Law Website
Don’t let these common excuses prevent you from creating an estate plan. Proper estate planning ensures your wishes are honored and reduces the potential for legal disputes among your heirs. Let’s work together to secure your future and provide peace of mind for you and your family.
