For most Americans, talking to a lawyer about estate planning is about as popular as getting your teeth drilled. That is why the clear majority of us don’t do it, according to a recent article in the New York Times. https://nyti.ms/2q14rh3.
So why should 2018 be any different? Let me offer some reasons.
Who Doesn’t Like Control?
When you create an estate plan, which can include such items as a Will, a Durable Power of Attorney, an Advanced Healthcare Directive and/or a Trust, you are taking control of your own and your family’s future. As opposed to dying intestate (which means that the State decides who and in what order to distribute your assets), you take control of those decisions. Do you one child who is always at risks from creditors? Create a spendthrift trust that shelters that child from losing his inheritance within months of receiving it. Do you have a charity that speaks to your heart and passions? Direct a portion or your estate to benefit the cause that you hold so dear. Do you love the notion of avoiding the tax man, after working so hard to build up your assets? Evaluate any number of approaches that focus on asset protection. These are just some of a few really good reasons to take control this year.
Estate Planning Deals with Life, Not Just Death
How many of us dismiss estate planning as something that only happens after we’re gone, so why spend time on it now? With Americans living longer and being at a higher risk of spending some of those years incapacitated, https://nyti.ms/2u6WQ5Q, we should all perceive estate planning as very much about the quality of our life. Who will make decisions on your behalf when you become incapacitated? Will they understand your wishes? Who will take care or your bills or your family’s bills? What about end of life decisions? My father lived a long and active life, and that included knowing how he wanted to die and giving me and my siblings clear instructions on his wishes. Estate planning is exactly about life.
Estate Planning Costs Should be Viewed in the Context of Probate Savings
Many Americans opt out of estate planning because of the perception that it simply costs too much. Plans can vary in expense, depending on the particular needs and wishes of the client. Sometimes a great deal can be achieved for a relatively modest fee. Sometimes estate plans will require more of an expenditure. These costs should be viewed, however, through the prism of the probate costs associated with an intestate proceeding (dying without a will and having to go through probate) or dying with a poorly structured estate plan (failing to maximize your potential tax savings). Going through probate can often mean additional expenses, including lawyers and administration costs. This money comes directly out of your estate and diminishes any inheritance to your loved ones. An estate plan that properly assesses the best approach to lowering estate taxes, avoiding probate altogether, or creating asset protection can significantly lower the costs of probate for your estate. In other words, the money you spend now can generate significant savings later. Viewed in this way, estate planning is perhaps more accurately described as an investment, rather than an expenditure.
In sum, there are many great ‘living’ reasons to tackle estate planning in 2018. I may be no dentist, but surely that’s worth a smile!