Numerous studies have shown that 51% of Americans age 55 to 64 do not have a Will and have no Estate Plan. Even worse, 62% of those aged 45 to 54 — and 67% of women that age — have no Will and No Estate Plan.
Assuredly, for those who do have a Will, it probably has not been updated in several years.
No matter what the excuse, there is, in fact, no legitimate reason for not having a current Estate Plan no matter what your present circumstances are, especially if you have children.
You will lose control over how your property will be distributed and how it might be used;
Without a complete Estate Plan, all those issues will be turned over to the court of local jurisdiction, and there will, no doubt, be a high financial and emotional cost for you and those left to sort out the various pieces of your uncertain legacy.
Estate Planning is more than who gets what when; it is the only way you can live out your final years in peace and relative comfort and know that you have done everything to protect your family after you are gone. You must plan for the worst and not simply hope for the best. Indeed, to have no Plan is a recipe for economic chaos and an emotional nightmare.
ESTATE PLANNING BASICS
According to the Financial Planning Association and other professionals, common reasons people avoid Estate Planning include:
All of those might appear to be valid reasons, although we all know they are not. What is apparent when viewed with an open unemotional mindset is that the benefits of having an Estate Plan are too numerous to list but do include:
Estate Plans can also address succession issues for a family business or provide for a family member who lacks the ability to manage his or her financial affairs due to disability or poor judgment. Trusts are an option and allow your beneficiaries to receive an inheritance in stages, and you name the Trustee to oversee the distributions.
The best Estate Plans are created by focusing on people, not just property. In its most basic terms, Estate Planning is how your affairs will be managed in the event you are no longer available because of your death or incapacity.
People tend to think that an Estate Plan is for the wealthy and time is on their side so planning can be put off until old age or retirement. This is a myopic way to view the situation. People of all incomes need to plan for the future. Estate Planning is not something one does when one retires. Time is not always on your side. Who can predict the future, and when is "soon enough" really "soon enough to plan?"
Estate Planning has many facets, and preserving wealth is only one aspect of it. If you consider yourself a person of modest means, what you have in the way of assets still needs to be preserved for those you leave behind. No matter how modest, no one should put his or her estate in the hands of an Administrator appointed by a Judge.
Nearly everyone has an estate. Your estate is comprised of everything you own, including your home and other real estate, motor vehicles, bank accounts, investments, life insurance, personal possessions, as well as your business and its assets. Whether you are married or single, a parent or childless, a millionaire or a middle-income person, you need an Estate Plan.
Consequently, you need to plan and delineate your wishes regarding end-of-life decisions and how best to dispose of your remaining assets. Only in this way can you provide for those you have left behind at a time when those you care about the most will need the comfort and solace of knowing you did your best to plan for each eventuality and contingency. When you provide specific instructions in your Estate Planning documents, you ensure that all the problems that may arise after you are gone or totally incapacitated can be avoided.
Every Estate Plan must also include more than just a list of your valuables and who gets what. If at all possible, it should also:
If you do NOT have a Plan, and since you have provided no directions or instructions, the laws of intestacy of your state of residence determine the distribution of all your assets. In that eventuality, the court makes all the decisions regarding your assets, including how they are to be used, transferred, or liquidated.
If you become disabled and unable to make your own decisions, specific statutory rules will take effect. The court, not your family, will control how your assets are to be used to care for you. An Administrator or Guardian appointed by the court will determine how all your assets are to be utilized during your disability.
This scenario can, and, no doubt, will become expensive and time-consuming; the entire matter is open to public scrutiny, and regaining control, should you recover from a disability, will be a difficult task subject to judicial inquiry and medical determinations as part of what may become an adversarial process.
If you die without a Will as part of an Estate Plan, i.e., what is known as "intestate," your assets, whatever they may be, will be distributed according to the probate laws of your state of residence. These laws have specific Rules and Regulations regarding the distribution of assets left by someone who dies "intestate," and those Rules and Regulations typically allow for the distribution of those assets by percentages of shares. If you are married and have children, your spouse and children each receive a percentage of your Estate. Click here for an outline of the Pennsylvania Rules of Intestate Succession.
Those shares, however, may not provide sufficient assets for your spouse. If you have minor children, the Court-appointed Receiver will control their inheritance. If both parents die (e.g., in a car accident), the court will appoint a guardian without knowing whom you would have chosen.
Distribution of Property. Without a Will or Trust, your state's laws of intestacy will determine how your assets will be distributed. Assuming your property is distributed to the right people under the State's Rules and Regulations, having the court supervise the distribution of your estate is often quite expensive and time-consuming.
Disability or Incapacitation. Without a Plan in place, the court will intervene and approve who takes care of you, whether or not you stay in your own home, how your assets will be used for your care, as well as the important healthcare decisions that may need to be made on your behalf, and who would be appointed to make those decisions. All of this would become a heavy burden on your loved ones.
Children and Heirs. Without a Plan, you lose control over the intended welfare of your children and grandchildren. You also give up any right to determine what assets your children receive and who will be appointed to be their guardians should a catastrophic event cause them to become orphans. Assuming good people are appointed as guardians for your children, without a plan you lost the ability to specify how your assets will be used for their benefit. Moreover, once your children reach the age of eighteen (18), they receive complete control of any assets the Court distributed to them. In many instances, however, they are not ready to assume that responsibility.
With A Plan. Assuming you have a Plan and your children are adults, do you have the right people in place to make the critical decisions related to your estate? Does your present Plan reflect the reality of your situation today? Circumstances and conditions may have changed; perhaps your spouse is ill, or divorce is looming; you may have parted ways with your appointed Executor or Trustee; you may need to provide for a child with a disability or with one battling addiction or with one who is involved in a rocky marriage; or it may be your business is on shaky ground, or a partner wants to retire or sell his shares in the company. Are you confident you covered all the contingencies in your Original Plan?
Keep in mind that longevity alters the playing field in all situations. Estate Planning is more than who gets what when; it is the only way you can live out your final years in peace and relative comfort and protect your family after you are gone. You must plan for the worst and not simply hope for the best. Indeed, having no plan is a recipe for economic chaos and an emotional nightmare.
Life brings significant changes, including birth, death, marriage, divorce, accidents, illness, disability, financial upheaval, and business succession. Therefore, it is only prudent to review the status of whatever Plan you have in place every few years to be sure your Plan is covering all the new possible contingencies and conforms to any changes in the law.
Every person and every family has unique personal, financial, and business situations. Choosing an Estate Planning Attorney and Advisor is a crucial decision. That person should be an experienced attorney with knowledge of the law and business and financial matters. Just as importantly, he or she needs to be sympathetic and empathetic so that you may feel at ease and comfortable in sharing your most personal details.
For more information, review our , or please click here to and complete the simple – and review the various ways that we can assist you and your family with your Estate Planning.
None of us likes to think about our mortality or the possibility of being unable to make decisions for ourselves. This is precisely why so many families are caught off-guard and unprepared when incapacity or death does strike. Do not wait. You can put a Plan in place now and change it later if your circumstances do change.
Knowing you have a properly prepared plan that contains your instructions and protects your family will give you peace of mind. This is one of the most thoughtful and considerate things you can do for yourself and those you love.
Reach out to the Ronald J. Fichera Law Firm, where trust meets excellence. Fill out the form below to secure your family's legacy and receive expert legal counsel. Your peace of mind is our priority.