THE IMPORTANCE OF ESTATE PLANNING
Not just for the wealthy!
October is National Estate Planning Awareness Month. It is an annual initiative to encourage individuals and families to create or update their estate plan to protect loved ones, assets and future wishes. As the attorney who handles the probating of estates, every day I see what happens if there is no estate plan for someone who has passed along with the negative consequences for not having a will or estate plan. The last thing a family should worry about after you die is whether your wishes are going to be honored, or any potential issue that can arise due to your failure to create an estate plan.
When most people hear “estate planning,” they picture complicated legal documents and million-dollar fortunes. The truth is that estate planning is simply about making sure your wishes are carried out—no matter the size of your estate. If you own a car, a home, a bank account, or even a beloved pet, you already have an “estate,” and you should have a plan for it.
When I meet with potential clients whose loved one have died, the first thing I ask is whether their loved one had a will or an estate plan. I ask because if their loved one did, then it is their wishes that control who oversees their estate and who will ultimately benefit from their estate. Not having a will results in a lack of control over your assets, as state intestate laws determine distribution, often leading to unintended beneficiaries and family conflict. It can also create a longer, more expensive probate process with higher administrative and legal fees, potentially leaving your family with less than anticipated. Without a will, your wishes regarding end-of-life care or the guardianship of minor children may not be honored.
There are many common misconceptions about estate planning – that you don’t have enough assets, that you are too young, or it’s too expensive. These misconceptions are exactly the reason you do need estate planning, as not having your estate plan is all the worse in these situations, especially when disagreeing heirs and minor children are involved.
Disagreement Among Heirs:
Ambiguity about your wishes can spark disagreements among heirs. This can lead to fighting amongst your family over property, personal belongings or decision-making authority. These disputes are costly and time consuming. Failure to plan may also result in unintended beneficiaries of your estate. Estranged relatives or distant family members may inherit.
Minor Children:
Minor children may inherit, which depending on the amount, may require additional legal work specific to their inheritance. That minor child may then take control of the entire amount when they turn 18, which could be financially risky if they are not mature enough to manage assets. Without planning, an ex-spouse may indirectly benefit through minor children. Additionally, if you don’t include in your estate plan your wishes for who will raise your children if something happens to you, then the Court will make that decision without your input. This person may not be who you would have wanted, and there could be financial strain if you have not made provisions for the children’s support.
Delays and Increased Costs of Probate
Estates without a will may take longer to administer because the court must appoint an administrator and identify heirs. Probate costs (court fees, attorney fees, administrator’s bond, etc.) are often higher than estate planning would have cost. Assets may remain frozen for months or even years while the process unfolds.
Planning for Incapacity:
You also need to make decisions for yourself if there comes a time when you can’t do it on your own. Estate planning typically includes powers of attorney and healthcare directives. Without them, Courts may have to appoint a guardian or conservator for you if you become incapacitated. Your family members may disagree with your medical treatment and finances. Decisions may be made by someone you would not have chosen. Guardianships and conservatorships are expensive and burdensome and can be avoided with the use of powers of attorney.
In short, without a will or estate plan, you lose total control. The law decides who inherits, who cares for your children without your input, and how your estate is handled – often at greater cost, with more delay, and a higher chance of conflict. Planning ahead can reduce stress and conflict, protect your children and loved ones, keep things simple and save money, and offers your family emotional peace of mind when they are most vulnerable. This is true in every situation and is not dependent on the size of your estate.
