Financial Literacy

Counting the Cost Now or Later

As an estate planning attorney I spend a great deal of time giving workshops and seminars that educate people about the world of estate planning and administration.  One of the questions I typically pose is how many attendants have an estate plan.  I am not sure if the only people who attend the workshop are those who don’t have an estate plan but the statistics present aren’t encouraging.  Maybe only those without a plan are compelled to show up.  In any case statistics show that more than half of the population do not have an estate plan.

One of the follow-up questions I ask is, why not?  These are some of the answers I have received.

  1. I don’t have enough to need an estate plan. My response has so many layers.  I typically start off with the fact that anyone with a life has something to protect and thus an estate plan is necessary.  The Last Will and testament identifies the person who will have the legal authority to uphold the rights of the person writing the Will.

 

The rights may include representing the person who passed away if there is injustice in the distribution of assets or an injustice that needs to be championed after death.  I advised a mother whose son passed away while in the custody of the police.  She needed to be appointed in order to have authority to question the events.

 

I have also had the displeasure of representing an estate in litigation that had very little assets – including a house with a reverse mortgage and a bank account with a negative balance.  Too often there are few assets but huge expectations.  The Will clarifies the expectations.

 

  1. I haven’t gotten around to it. Procrastination is truly one of the most popular excuses that people offer for not having an estate plan.  The greatest story is when a lady met with me to discuss follow up questions to the seminar presented.  She stated that she was going to wait to create an estate plan.  When asked her age she shared she was 90 years old.  Her daughter created an urgency that she didn’t experience.

 

Many people identify that procrastination was the reason when they knew that they needed to secure the plan for their family.    The longer we wait the fewer the options in planning exist.

 

  1. Indecision as to appointment and distribution. I have heard people say that they don’t have any siblings or family members that they trust enough to care for them. I assure folks that there are no restrictions that require you to appoint a family member in the trusted roles.  There are rules that can be put into place that will restrict the capacity and create checks and balances for protection.

 

There also have been those who do not know to whom they want to leave their precious belongings to.  My response is that the law makes designations if you don’t.  The law typically will not create a plan based upon the sentimental relationship that you share but the legal relationship.  Based upon the atypical, blended relationships of our community we don’t want to rely on the blood relationships as the determination of distributions.  As we saw with the legendary artist Prince who did not make designations people who had limited relationships received the same distribution of those who were actively involved in his life.

 

I support people to make the decisions based upon the current circumstances and put safeguards in place.  It is better to make a temporary decision now that makes sense with the personalities in your life than to make no decision that is based upon stranger’s appreciation of the standard family structure

 

  1. Amazingly people still say that the reason to not plan is that something will happen if they take any action.  I typically guarantee people that something will happen even if you don’t plan.  It’s usually just a matter of time.

 

In only a few cases, where are there bountiful assets, would I suggest that something would happen as a result of planning.  I tell folks that if someone was going to take action against you because you have an estate plan there is a great reason to make a plan so that the person who would act in such a manner doesn’t receive your treasures.

 

  1. I don’t want to pay for it. So often people cite the cost of an estate plan as a reason not to do anything.  Many of those people haven’t pursued finding out the cost.  So often those who truly don’t have the means to pay an attorney could benefit from a pro bono or low cost clinic.  However, the truth is that many people don’t prioritize the value of the creation of the estate plan.

 

Truthfully, the more complicated the estate, the more expensive the plan.  To whom much is given, much is required. Unfortunately, not creating an estate plan does not discount there will be a need to settle an estate. The lack of planning simply means that the cost will be at the other end – in the probate process.

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