We’d like to end this week by discussing some of the common reasons individuals have not created a plan.
“I don’t have the time.”
We commonly hear this in our office. Individuals are interested in estate planning or it is something they have been trying to get to for a while but keep putting off as other things come up. Unfortunately, however, it is something you can only put off for so long. Our lives can, and do, change rapidly. Having an estate plan in place can mean extra layers of security in light of those changes. It can ensure you have someone who can step in and make decisions for you, when you can no longer make them yourself. It means protecting your assets for your and your family’s use and having a legacy to pass on.
“Estate planning is only for the super-rich.”
When we hear about estate planning, it is usually in regards to a wealthy businessman or celebrity who made some error, did no planning, or has family members who are angry about the planning that was actually done. The topic catches people’s attention: Rich people have so much, surely they need planning and can afford to have the planning done correctly. By comparison, when the average person thinks about their own property and planning needs, they assume that it is not necessary because they do not have anything close to Bill Gates’ billions.
However, this could not be further from the truth. Estate planning is about more than just the money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated and someone has to make decisions on your behalf–a far more likely scenario. If you have not done any planning, the court will have to appoint someone to make your medical and financial decisions for you. This can be very time consuming, expensive, and public. It can also wreak havoc on a family if they disagree about who should be appointed and how decisions should be made.
Even for those of modest means, who gets your hard-earned savings when you die is an important consideration. Without any planning, state law will decide who gets what-and many times, what the government’s best guess as to what you would want is contrary to what you want. But, because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in and do it for you.
“I’m too young to do estate planning.”
It is a common belief that estate planning will only be beneficial to you as you age. However, it can be advantageous to young adults as well.
For those who recently turned 18 it can mean having a Power of Attorney for Health Care and HIPAA Authorizations in place so your loved ones can receive medical information and made decisions if you became incapacitated.
For new parents it can mean having named guardians in place so the people you trust are taking care of your children. This can also include leading instructions for them so your children are raised how you would.
“We did our wills right after we got married 30 years ago and see no need for further planning.”
Many people believe that once they have created a will-whether drafted by an experienced attorney or using a DIY solution or online form- they have avoided probate. Unfortunately, they are wrong.
While a will is a great way to designate a person to wind up your affairs once you have passed, determine who will get your hard earned savings and property, and, if necessary, appoint a guardian to care for your minor children, this document has to be submitted to the probate court to begin the process of distributing your money and property.
“All my property is titled in joint tenancy with my spouse, so I don’t need to plan further.”
For many married couples, it is common to own property or bank accounts jointly. If these assets are owned jointly or as tenants by the entirety, when one spouse dies, then the surviving spouse automatically becomes the sole owner. In most cases, this is the desired outcome for married individuals.
However, this approach can be dangerous. While it is convenient for assets to pass automatically to the surviving spouse, this outright distribution offers no protection. What happens if, after your spouse dies, you get into a car accident and are sued? If the assets you owned jointly automatically became yours alone, this money and property are available to satisfy any judgment that could be entered against you resulting from a lawsuit.
Additionally, what if, after you die, your spouse gets remarried? If the brokerage account you owned jointly becomes your spouse’s only, your spouse is now able to spend it all in any way he or she wants without any consideration for your wishes or the next generation. Your spouse’s new spouse could go out and buy a sports car with the money you intended to pass to your children. With blended families being common today, this is a real concern for many people.
Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and plan out what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property is distributed the way you want.
“Estate planning is too complicated and expensive.”
An experienced estate planning attorney can help you and your family members create an estate plan tailored to meet your unique needs and carry out your wishes. They can also help you update a pre-existing estate plan. We can provide each family member with guidance and information about the options available to them. We help you put a plan in place that will prevent unnecessary stress, legal expenses and taxes, uneven inheritances, disputes between family members, and delays in passing life savings on to loved ones. In addition, it will provide you and your family members with the peace of mind that comes with knowing there are plans in place for your care and that your wishes will be honored once you pass away.
We are here to help you take the first step in updating or creating your plan. Just call us at (248) 409-0256!