The idea of implementing an estate plan might be one of the scariest things you have to confront as an adult. But estate planning does not have to make chills run down your spine. On the contrary, estate planning is empowering for both you and your family and allows you to live confidently knowing that things will be taken care of in the event of your passing or incapacity. Remember, estate planning is not just for the ultra-rich. If you own anything or have young children, you should have an estate plan. Read below to find out reasons why.
Benefits of Estate Planning
Proper estate planning accomplishes many things. It puts your financial house in order. Parents designate a guardian for their minor or disabled children, so they're raised by someone who shares your values and parenting style (rather than whoever some judge picks). Homeowners can make sure their property is transferred to a designated beneficiary in the event of untimely death. Business owners can ensure the enterprise they've worked so hard to build stays within the family.
Yet, according to WealthCounsel's 2016 Estate Planning Literacy Survey, only 40 percent of Americans have a will and just 17 percent have a trust in place. This translates to a majority of American families not being adequately protected against the eventual certainty of death or the potential for legal incapacity. In the Caring.com 2021 survey, the results were even lower, at only 32.9% of adults with a will. Despite COVID-19, the overall percentage of Americans with a will has not significantly changed.
When it comes to estate planning, knowledge is vital. Less than 50 percent of those surveyed by WealthCounsel understood that an estate plan can be used to address several concerns - financial or non-financial matters - including health decisions and guardianship, avoiding court, and preempting family conflicts, as well as taking advantage of business and tax benefits.
Estate Planning Horror Stories
Legal disputes over estate plans and wills - or, usually, the lack of having these in place at all - are common. These conflicts can cause harm to family relationships and be financially burdensome. Disputes among the rich and famous often made headlines.
Some scary outcomes of inadequate or non-existent estate planning include:
- Prince, who died without a will, leaving lawsuits and hefty lawyer's fees for his family;
- Whitney Houston, whose failure to update her will negatively affect her daughter Bobbi Kristina's inheritance;
- James Gandolfini, who didn't finish planning causing his estate to be hit with unnecessary and easily avoided death taxes;
- Michael Jackson, who set up trusts for his children but never funded them resulting in multiple probate court battles; and
- Philip Seymour Hoffman, who never set up trusts for his kids causing their inheritances to be unnecessarily taxed.
These horror stories are not limited to wealthy celebrities. WealthCounsel's survey found that more than one-third of respondents know someone who has experienced or has suffered family disputes due to the failure of an existing estate plan or inadequate will. Additionally, more than half of those who have established an estate plan did so to reduce family conflict. Preserving family harmony is for everyone - not only for the wealthy or celebrities.
Attorneys: Your Guide to Not-So-Spooky Estate Planning
Estate planning can be confusing as each circumstance is unique and requires different tools to achieve the best possible outcome. Nearly 75 percent of those surveyed by WealthCounsel said estate planning was a confusing topic and valued professional guidance in learning more - so you're not alone if you aren't sure where to begin.
We're here to help. An estate planning attorney is essential in determining the best way to structure your will, trust, and estate plan to fit your needs. If you or someone you know has questions about where to begin - contact us today. Call us at 770-425-6060.