Wills, Estate Plans & Trusts – Oh My!

Jess Bost, COO, Wealth Advisor

If you’re a little lost and maybe even frightened by the idea of tackling legal documents that spell out how to handle your affairs in the event of incapacitation or death, you’re not alone.

Based on a recent study, only 42% of American adults have estate planning documents such as a will or living trust. For those with kids under 18, the number is even lower at 36%.

Two of the top reasons people gave for not having an estate plan in place:

  • “Just haven’t gotten around to it.”
  • “Don’t have enough assets to leave anyone.”

As financial advisors, I’ve heard these responses more times than I can count – from friends and family as well as clients The first results from the general business of modern life, the second is likely related to so many Americans living paycheck to paycheck and/or having no emergency savings.

Preparing your estate plan, although maybe not on your list of leisure activities, can help you prepare for the future and gift confidence and clarity to the next generation.

Four (of Several) Reasons to Have a Clear Estate Plan

There are many reasons to have an estate plan established, but here are a few things the courts can’t do for you once you’re gone.

Locate Available Assets

Do you have grandfather’s watch and your great aunt’s necklace in a safety deposit box no one knows about? What about documents your family will need access to? Do you know where – and how much – your assets are? We’ve seen these situations many times in helping families work through the estate planning process.

Designate Preferred Heirs

Probate court can’t name your beneficiaries for you. One of the most famous cases of estate plans unprepared is the rock star Prince, who died with an estate size estimated somewhere between $250 million and $300 million the family is still fighting over. Estranged siblings and others have come out of the woodwork to grab at the fortune, a dysfunctional end even a simple plan would have helped alleviate.

Define a Specific Plan for Distributing Assets

A determined plan and schedule can be especially important in distributing assets to heirs, most importantly those who are underage or young. The speed at which inherited funds disappear is well-documented, and your advisor can help you dictate the purpose of the funds you leave behind.

Alleviate Family Stress

Alleviate the stress, anxiety and potential friction that can come up when family and friends get entangled in ordering your affairs. The courts can’t do this, but you can help with pre-planning and by clearly expressing your legacy wishes.

Worth the Investment (of Money and Time)

Preparing your estate plan is a legal process that requires hiring a qualified lawyer, which inevitably comes with an expense. However, the cost of additional legal resources paid by the estate to develop a plan post-mortem and the opportunity cost of assets held in probate for an extended period of time could easily prove to be the greater burden – one that may potentially be unfairly placed on the shoulders of loved ones.

Now is the time to make these tomorrow plans. The probate system is often generic and inefficient, and these decisions are best made by you personally. Estate planning is extremely personal, and these decisions can’t be made with one-size-fits-all strategies.

For a simplified guide to estate planning, including guidance on how to get started on your own estate plan, download our complimentary guide: “Estate Planning Simplified.”

Download the Guide!

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