Most people think of estate plans as something rich people need or elderly people. However, anyone with possessions, children or dependents, or even a specific thought on their medical care needs an estate plan to avoid unnecessary family stress and financial/legal obligations in an already stressful time.
Estate planning doesn’t prepare for death but instead, gives the owner of the assets control over where possessions go, who takes care of the children and how to navigate the legal world during a time of great sadness. The reality is that the consequences of not doing so are worse than far too many people think.
Avoiding the Inconveniences of Probate
The first result of failing to create an estate plan is that a person passes away with no legal recourse established. It’s called probate. When a person has no estate plan to lay out for them how their assets should be designated, everything goes on record and in the court system for everyone to see. It’s time-consuming, sometimes taking months or years for certain things to be decided. It’s especially problematic for frozen bank accounts (no one has access to wealth that could help them) and properties that cannot be quickly changed without legal documentation.
Probate is public information. Anyone can look up who got what and how much something was worth. If a family desires privacy, obtaining this information is a massive slap in the face at a time when people should have their peace respected.
There are also court fees involved with probate. This money comes out of the estate and reduces what potential beneficiaries will receive. In some cases, thousands of dollars go to court fees for what could be avoided had professionals been involved from the beginning with comprehensive estate planning services to minimize directs given to the courts and time wasted that could deplete funds.
Avoiding Family Fighting
What people forget is that one of the biggest reasons for family fighting is when one sibling thinks he/she should get one thing, another sibling thinks he/she should get something else, or a spouse disagrees with what family members assumed they would get. Families fight over division when they agree at the get-go but disagree about timelines. Families fight over what they “thought” their loved one said when time passes and more family members step in (step-siblings, etc.).
Even non-financials play a role here, for example, emotional memories that mean more than the actual dollar value might line the pockets of someone who had no connection to the object but wanted money instead. Estate planning before death creates documentation that facilitates peace so that when emotions are high, the hard decisions with no guidance are minimum.
Avoiding Healthcare Confusion
Finally, estate planning helps avoid intrusions regarding healthcare decisions as well. What should happen if a loved one becomes incapacitated? Is there anyone willing to keep her/him alive if s/he medically cannot? Hospital policies sometimes keep people on life support indefinitely if there’s no directive from that person, putting family members in situations where they have to basically kill loved ones if there’s no hope or opportunity.
This is stressful. Should someone maintain life support? What treatments are acceptable? Who wants to make these decisions? Without advanced healthcare directives, facilities make their own decisions which may backfire for everyone involved. If family members disagree, adult children, spouses, ex-spouses, this puts the matter into court where a judge decides for persons they’ve never met instead of letting families fight it out among themselves.
Protecting Minor Children
For parents, estate plans designate who will look after minor children. If there’s a problem where both parents die, who will take care of the children? A court will make that decision but best guess is not good enough to determine who is best fit regardless of geographical distance.
There may be a relative who shares parenting ideals and philosophies yet another relative who is related is just as easily related but won’t run a quality home. Yet without an estate plan, it’s arbitrary and best guessed, meaning children will be taken from one home into another without any idea of how or why that they’re being cared for as someone else sees fit but not how their parents would have cared for them.
There is also a certain way that assets could be given to minors, as funds for education up until they reach 18 but not as a lump sum when they turn that age. Estate planning allows parents to determine when their kids get their inheritance from which, if they get it at all, but not in a way that empowers teenagers who have just been upheaved emotionally with little direction about what to do next with money they’ve never had access to because they don’t know how to take care of it yet.
Business Ownership
Finally, business owners need estate plans if anything for succession purposes. Without designated partners, businesses cease functioning post-death, and if the initial owner didn’t specify who would take over, disaster strikes with partners who think they know best and other family members who have no idea what they’re doing working against them. Who knows how long it will stay in probate before anything viable can happen?
A solid estate plan outlines what happens with business interests and provides buyout agreements for partners within a specified timeframe at a specified cost, directions on selling businesses so assets can be divided into cash down the line and more. The immediacy protects, and prevents liability issues down the line.
Blended Families
Blended families have more arguments because state laws give spouses everything compared to kids; if there isn’t an estate plan in place to ensure equitable means from both sides whatever happens after someone’s death is what’s going to happen, even if it’s ineffective.
An estate plan helps balance competing interests so that current spouse gets what’s needed while prior children’s assets are maintained, for children who might come into the next marriage may find themselves left out due to circumstances beyond anyone’s control but instead from state law.
Acting Now Instead of Later
With all of these potential issues at stake, children whose futures can be jeopardized through adult oversight, it’s clear that putting off creating an estate plan is one of the worst mistakes people can make for themselves and their families.
People think they have all the time in the world; they think their lives are too simple; they don’t want to pay for something they think doesn’t apply to them, but then an accident occurs. Someone passes unexpectedly. Someone thinks they’re fine and they’re not.
Estate planning does not need to be complicated or expensive; it just needs holistic thought with professional advice so that peace of mind and family protection are more than anticipated by alternatives because there would be nothing worse than leaving legal issues behind while clients go through mourning their loss without putting these plans into action beforehand.
