According to a survey conducted earlier in 2019, only 40% of American adults have a Will or Trust. That percentage drops dramatically for younger age groups. For example, only 19% of people ages 18-34 have a Will or Trust.
So what’s the big deal?
As Baby Boomers pass away, experts predict that over $68 trillion in wealth will be transferred over the next 25 years. And the estate planning of those Boomers will control where all that wealth goes.
Despite the hugeness of those numbers and the importance of estate planning—or perhaps because of it—most people find it easy to procrastinate when it comes to actually setting their affairs in order.
Here are the top reasons (in no particular order) people give us to explain why they delay estate planning:
1. “I’m too young.”
First of all, you are never too young to have an estate plan.
I wrote a series of articles on estate planning for Millennials, but you can substitute “Gen Y” or “Gen Z” or any other generation. Bottom line: everyone needs an estate plan.
Whenever young people say “I don’t have enough assets for an estate plan” or “I’m going to wait until I have a family,” what they are really saying is, “I don’t plan on going anywhere anytime soon.”
Because young people don’t die, they live forever.
They will never become incapacitated.
Nothing ever bad or unexpected will happen to them. … Right?
It’s easy to procrastinate creating an estate plan when you are not on your death bed and are not incapacitated. And until you are faced with mortality head-on, it can be difficult to grasp the importance of organizing your affairs.
The sad truth is that people die at all ages. Life is unpredictable. You never know when your time will come, so you should prepare as if you will die tomorrow.
Remember: Estate planning is not just for you, but for the people who love you. They will be the ones left to pick up the pieces if you don’t plan your estate.
2. “I don’t want to think about death.”
Thinking about dying, even indirectly through estate planning, makes many people uncomfortable.
There are various complicated psychological explanations for why this happens. But for many people, it comes down to a belief (perhaps subconscious) that talking about death will somehow hasten it.
“Speak of the devil, and he shall appear.” That kind of thing.
Conversely, not thinking about death will somehow avoid it. It may sound silly, but it happens. Maybe you are different. Maybe you just prefer to focus on other things.
But estate planning is not only about planning for death. It is also about planning for your incapacity.
Related post: Durable Powers of Attorney: Explained
Whatever the case, avoiding an issue does not make it go away. And when it comes to estate planning, avoiding it can have dire consequences for you and/or your loved ones.
Sometimes you just need to suck it up, grit your teeth, and push through the uncomfortable-ness of it all.
That’s what I suggest when it comes to estate planning. That way you won’t have to worry about it anymore (at least for a while).
3. “There won’t be a fight over my estate.”
Some clients believe they don’t need an estate plan because they only have one child or because all their children “get along.”
There are a few problems with that reasoning.
First, avoiding a “fight” over your estate is not the only reason to have an estate plan. A good estate plan also addresses:
How your beneficiaries will receive their assets (all at once? in annual portions?).
Who will administer your estate.
Who will take care of you when you can no longer take care of yourself.
And much, much more.
If nothing else, having an estate plan can help make things much easier on the loved ones you leave behind after your death.
Related post: The Ultimate Guide to Lawsuit-Proofing Your Estate Plan
Second, what if your child is a minor when she inherits your estate?
Oklahoma law provides that minors who inherit property must have those assets managed by a guardian until they reach age 18. Even so, is 18 old enough for your child to have access to hundreds of thousands of dollars?
Or what if the child’s natural guardian after your death (e.g., an ex-spouse) is someone who you would not want to have access to your child’s inheritance?
To address these concerns, you can create a trust and designate a trustee to manage your child’s inheritance until they are old enough to manage it on their own.
Third and finally, an estate plan can prevent a messy custody battle.
If you and your spouse die, who is entitled to a guardianship of your minor child? Generally, the court looks to next-of-kin; however, what if, for example, both sets of grandparents want custody. Who does the court choose?
Whatever the outcome, your child will be stuck in the middle of the fight.
An estate plan can avoid lengthy, traumatic litigation by nominating a guardian for your minor children in advance.
Related post: What is a Nomination of Guardian?
It is nice to hope that no one will fight over your estate. But the reality is that families (even ones that used to get along) fight over estates all the time.
Having an estate plan can help avoid that possibility.
4. “Estate planning is expensive.”
Yes, sometimes it can be expensive.
But so is buying life insurance, buying a house, buying a computer, or buying anything else that makes our life or our family’s lives better.
With estate planning, you are not just paying for a nice piece of paper. You are paying for the peace of mind that comes with knowing your affairs are in order and that your family will be cared for after your death.
There are also less expensive estate planning options.
Pay-on-death (POD) accounts, transfer-on-death (TOD) deeds, advance directives for health care, and many other documents generally cost only a few hundred dollars.
These options can be relatively inflexible and carry their own risks and limitations, but they are much better than having nothing.
Related post: 7 Mistakes to Avoid When Naming Beneficiaries
You should also consider the cost of not having an estate plan.
In Oklahoma, a living trust usually costs anywhere from $2,500-3,500. Probate, on the other hand—which your family will have to go through if you leave a probate estate—often costs in excess of $5,000, sometimes even more.
Probate is expensive.
Or suppose you don’t have a Durable Power of Attorney and you become incapacitated or incompetent.
Your family may have to spend many thousands of dollars obtaining a guardianship in order to make decisions for you.
With all the time, stress, and money involved in probates and guardianships, you can avoiding many more thousands of dollars, time, and well-being by creating a solid estate plan.
5. “I don’t have enough assets.”
As mentioned above, there are reasons to have an estate plan other than passing on your assets: Naming a guardian for minor children; giving someone a power of attorney to make health care and/or financial decisions for you; stating your wishes regarding end-of-life care. The list goes on.
Related post: The Definitive Guide to Advance Directives
But aside from the practical advantages of passing on assets or providing for your own lifetime care, an estate plan also has the benefit of leaving less of a mess behind that your loved ones will have to clean up.
Even small estates can require a lot of work to administer.
Distributing personal effects and other property, paying bills, canceling services and subscriptions, contacting advisors and family members, planning a funeral, securing the estate against identity theft, etc.
At the very least, you should prepare an estate planning letter of instruction.
Related post: 3 Magic Ingredients in a Great Letter of Instruction
Imagine that, after you die, you could stand over your family’s shoulders and walk them step-by-step through the process of settling your estate. Direct them to all the information they will need.
This type of planning can save your loved ones a lot of trouble and stress after you are gone.
6. “It’s a lot of work.”
Like anything worthwhile, estate planning certainly does involve work.
However, estate planning is not nearly as painful as it sounds. At Postic & Bates, we try to make the process as painless as possible. Here’s what it looks like:
We visit for a one-hour (free) consultation to help you decide what plan works best for you.
You fill out an information form.
We prepare drafts of your documents so that you can review them and make any changes.
You come into our office to sign your documents.
From start to finish, the estate planning process doesn’t need to take more than 1-2 weeks.
Sometimes clients like to take time to think about things or want to review the documents with us. That is perfectly fine! We move at your pace.
My point is this: Estate planning does not involve as much work (for you, at least) as you may think.
More importantly, though, the work is worth it. The time you spend getting your affairs in order serves a very important purpose.
Because estate planning is not just for you. It is for the people you leave behind. And a good estate plan makes things as simple as possible for your loved ones.
There are even things you can do without the assistance of an attorney.
Create an estate planning letter of instruction (see above) and talk with your family about what to do after your death—what we call an estate planning fire drill.
These steps do not help you avoid probates or serve the important legal purposes of formal estate planning documents. However, they are better than nothing.
7. “I don’t know why I need one.”
If you have asked this question, then you came to the right blog.
Here are some helpful articles to give you a basic understanding of estate planning and why it is important:
Estate Planning Basics You Need to Know
What Should Be On Your Estate Planning “Bucket List”?
What Is the Difference Between A Will and a Trust?
5 Tips to Create Your Digital Estate Plan
There is no “one size fits all” approach to estate planning. For that reason, the best way to figure out an estate plan that works best for you is to call and meet with an attorney to discuss your options.
Secure Your Family’s Future Today
Everyone can come up with reasons to not do something. Estate planning is no exception. But if you put off your estate planning for too long, your family and loved ones—not you—will be the ones to suffer the consequences.
For more information about creating an estate plan or updating your existing estate plan, contact the experienced Oklahoma City estate planning attorneys at Postic & Bates for a free, no-obligation consultation.
[As with all our blog posts and other publications and resources, the contents of this article do not constitute legal advice and are subject to our site-wide disclaimer.]
