People often avoid estate planning for various reasons. Here are the top five excuses give for avoiding estate planning. Thankfully, you can combat those excuses with helpful solutions.
1. I CAN’T AFFORD IT.
There is a commonly-held myth that estate planning will be expensive because it is reserved for those with Kardashian-level wealth. While expense is a real hurdle for many, you can get a will for quite a low amount of money because your estate is probably not complicated. Additionally, with proper planning, you can get powers of attorney for your financial and medical decisions and other safeguards for yourself and your kids. Don’t delay because tomorrow is not promised.
2. I ALREADY TOLD [INSERT TRUSTED PERSON] TO TAKE CARE OF EVERYTHING.
Out of all the reasons I hear, this one makes me the most uncomfortable and is a common way to unintentionally disinherit your heirs. For example, say you leave your life insurance or retirement to your brother with the understanding (maybe an email or letter) that the money is to take care of your minor kids in the event of you and your spouses’ untimely death.
When the money is transferred to your brother, it is actually HIS property, and there is no way to enforce how he spends it. His creditors can get to it, he can use it for an emergency, and a ton of other reasons. Basically, your kids can be disinherited!! A better solution is to set up a trust for your kids with instructions on how to use the money for their health, education, and maintenance.
REMEMBER: Minor children (under 18) can’t inherit and manage property. They need someone to MANAGE it for them.
3. I’M TOO BUSY.
C’mon. Too busy? This is a terrible excuse to put off estate planning. Also, putting off planning is a choice to ignore doing the right thing for yourself and family. Doing nothing is a choice. I won’t belabor the point, but the business of life isn’t forever. Your legacy will outlast you.
4. WE CAN’T AGREE ON WHO TO LEAVE THE KIDS TO.
If this is you, then you have an F in estate planning because not doing anything is a choice to have the courts decide. Let’s try to get you to at least a B+!!
Indecision among parents or a lack of good options is a common reason that parents use to justify why they have no plan for their kids. Merely saying that you have talked to your sister and she has agreed is not enough. If you die with no plan, the courts will figure out who should be the guardian of your kids (and your sister may not get chosen in a situation where several undesirable family members step up).
Your will can name a guardian for your children. Better yet, you can name a guardian for the care of your children (Guardian of Person) AND a guardian to manage money for your kids (Guardian of Estate). So, if your sister is loving but terrible with finances, name your CPA cousin as the financial decision-maker.
Even if you STILL can’t agree, then complete a will without assigning a guardian for your child(ren). That will get you a B+. Later, you can designate a guardian and get that A!
5. I DON’T HAVE ASSETS.
If you are young, single, childless, and/or broke (sounds like a bad country song), you may not need a will. Instead, designating beneficiaries of your life insurance, retirement or similar accounts may be sufficient. BUT, don’t stop there because you should strongly consider getting the following documents:
- Statutory (Durable) Power of Attorney [states who has financial decision-making authority for you];
- Medical Power of Attorney [states who has medical decision-making authority over you if you are incapacitated or disabled];
- Living Will [states your medical preferences if you are incapacitated (think life support)];
- HIPAA directive [lists who can get access to your medical records].
At Ibekwe Law, PLLC, we can help you overcome your excuses and protect yourself and your family.