If you don’t have an estate plan, you are not the only one. Very few of us wake up and look at our To-Do list to find “Create Estate Plan” on top. Usually, it takes a major life event for us to realize the importance and necessity of such a document. These events are typically, Marriage, Birth of a Child/Grandchild, Divorce or Death. It is these events that causes us to take into account the importance of time.
As an estate planner, I constantly instruct others as to the importance of these documents, even starting off with a simple will. Despite my urging, many still don’t do it. So here are the reasons I have heard that most of us avoid estate planning.
1. They Don't Have the TimeWe are busy people! Between work and home life, our lives runneth over. It’s so easy to bump this task to the bottom of our list. Unfortunately, there are just certain things that you have to take time to take care of, and estate planning is definitely one of those things. Naming beneficiaries and an executor are two musts.
Take the time to think this through.
If you're married you probably think your spouse will get everything. While that may be true, you don't want your relatives and your spouse fighting over some piece of furniture or other trinket. If you are single, then it won't be as obvious as to who gets what, especially if your siblings and parents survive you. Stop procrastinating you may not get another chance.
2. They Don't Want to Think About DyingThis is probably the most common reason people don't do some estate planning. Nobody wants to think about their own mortality, but we all will leave this earth someday. Why not do it while you are healthy? Estate planning can challenge your thinking. You will have to consider things like, who will get custody of your minor children, who will get your money, how that money will be spent and where you'll want to be buried. It makes you think about not being here and how your family will cope. Estate planning is uncomfortable but necessary.
3. They Don't Understand ItThis is a valid reason in my opinion for putting off estate planning… for now.
You must find a financial planner and/or estate planning attorney that can analyze your estate and educate you on your choices. You may not have an estate large enough for a complicated trust, but that doesn't mean you don't need a will with certain provisions in it. For example, if you become incapacitated from an accident, who will pay your bills? Do you want to be kept on life support? Make sure you get an education.
4. They Don't Think They Have an Estate to Worry AboutSome of you may be thinking that you don't have enough wealth to worry about estate planning. Right now the federal estate tax ceiling is close to 11 million dollars. Very few people have this amount of money, so they think that they don’t have a sizeable estate.
This is a major misconception. First, your estate can include something as simple as owning a car or a home or even life insurance. Second, I tell clients to think of their loved ones as part of their estate. How would you like what you pass on to them to affect their standard of living? Should there be any precautions so that the assets are protected from divorce, lawsuits, bankruptcy or even predators? If this money is meant to be passed down to your grandchildren, how can they use that money in a way to honor your memory and values? Third, if you don't have a will or a named beneficiary, then the probate process could be pure hell for your survivors. Parents don’t want their death to be the cause of family tension. Make sure you do some estate planning today before things get complicated.
If you live in Merion, Penn Valley, Gladwyne, Haverford, Villanova, Paoli or anywhere else on the Main Line, Montgomery County or Philadelphia County and would like more information about this topic, please contact my office.