fbpx

Why You Need an Estate Plan

More than half of all Americans do not have a will.

The last thing most people want to think about is their own demise. Perhaps that is why, according to a 2017 survey by caring.com, almost 60% of Americans have yet to legally document their end-of-life wishes, a process known as estate planning.

There are three main goals of estate planning. In no particular order, an estate plan will lay out:

1.) How your assets are to be distributed and managed after you die (through a will and also possibly through trusts, depending on the complexity of your situation).

2.) Who is allowed to make financial and health-related decisions in the event you become incapacitated (called a Power of Attorney and a Medical Power of Attorney, respectively).

3.) The types of medical treatment you wish (or do not wish) to receive in the event you become terminally ill, and whether you would want to be kept on life support (called a Living Will; oftentimes a Living Will and Medical Power of Attorney are collectively referred to as an Advanced Medical Directive).

Why, you ask, do so many adults live in seemingly-ignorant bliss over something that has the potential to unravel an entire family? Well, like many things in life: if it’s easy to do, it’s also easy to not do. Here are the most notorious excuses:

“Estate Planning is only for the rich and famous”

Wrong, wrong, wrong!

If estate planning was only for the uber-rich, then how can you explain celebrities such as Aretha Franklin, John Denver, and Prince (just to name a few) who all died without basic estate documents in place? Even Abraham Lincoln – who was a lawyer by trade – did not have a will! Oh, the irony.

Dollars and cents aside, here are some questions you should first ask yourself:

  • Are you married?
  • Do you have kids?
  • Do you want your kids to have an inheritance? If so, should it be split evenly?
  • Do any of your kids have special needs?
  • Are you worried one (or all) of your kids aren’t responsible enough to handle large sums of money?
  • Would you rather leave some (or all) of your money to a university or charitable entity?
  • Do you have both biological children and step-children from multiple marriages? How should an inheritance be divided between these children (if at all)?

While your bank account might look a little different than a celebrity’s, chances are you answered “yes” to at least one of these questions.

If that is the case, it’s time to pick up the phone and set up an appointment with an estate attorney. Because without legal estate documents, state law will dictate these decisions for you.

“I just haven’t had the time. I’ll do it later”

These days, time is our most valuable resources. Life gets busy. We get pulled in a hundred different directions.

But accidents happen. There are many non-money related reasons why having an estate plan is a smart move.

For instance, consider what could happen if you were left in a coma following an accident. Without a Power of Attorney, no one could make financial or medical decisions in your place until it goes through the proper legal channels. As you can imagine, this is not a quick process and could be a waste of precious time during an emergency.

Or even worse, what if that accident left you terminally ill, with no hope of recovery. Would you want to be kept on life support? Are there certain medical treatments you would (or wouldn’t) want to receive? Without an Advanced Medical Directive, your family and health care providers will not have answers to these questions. Remember Terri Schiavo? This exact situation sadly resulted in a 12-year legal battle between Terri’s husband and her parents over what she would have wanted.

Going one step further, what if you and your spouse were in a serious accident. Who will take care of the kids? Unfortunately, the options are black and white: you either proactively decide yourself (in your will) or state law decides for you. And the state may or may not make the decision you would have wanted.

Death is inevitable, and accidents are unpredictable. So do right by your family and visit an estate attorney before it’s too late.

If you already happen to have estate documents in place, it is generally wise to revisit your plan following major life changes such as marriage, births, and divorce. Life changes, so a plan that was relevant 20 years ago may no longer make sense today.

While meeting with a lawyer is hardly a fun experience (especially when death is the topic), an hour or two of temporary discomfort should ultimately lift a gigantic burden off your shoulders – one that you may not have even realized was there. That’s a pretty good trade-off if you ask us.

A key part of estate planning (and financial planning in general) is just getting organized. Keeping your financial affairs organized and easy-to-follow can provide your loved ones some comfort, guidance, and direction during an otherwise challenging time like death or emergency.

As such, we would like to offer our Financial Records Organizer workbook. Below is a snapshot of the first few pages for visual reference. The Organizer is available via PDF or hardcopy.

Please fill out the form below or email resources@taylorhoffman.com to get your free copy today!

Have questions about how an estate plan impacts your financial strategy? Set up a consultation today.

  • This field is for validation purposes and should be left unchanged.

Disclosures:

Taylor Hoffman is an SEC registered investment adviser with its principal place of business in the State of Virginia. Any references to the terms “registered investment adviser” or “registered,” do not imply that Taylor Hoffman or any person associated with Taylor Hoffman have achieved a certain level of skill or training. Taylor Hoffman may only transact business in those states in which it is registered /notice filed, or qualifies for an exemption or exclusion from registration /notice filing requirements. For information pertaining to the registration status of Taylor Hoffman or for additional information about Taylor Hoffman, including fees and services, please visit www.adviserinfo.sec.gov.

The information contained herein is provided for informational purposes only, represents only a summary of the topics discussed, and should not be construed as the provision of personalized investment advice. The contents should also not be construed as tax or legal advice.  Rather, the contents including, without limitation, simply reflect the opinions and views of the author. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change without notice. There is no guarantee that the views and opinions expressed herein will come to pass.

This document contains information derived from third party sources.  Although we believe these third party sources to be reliable, Taylor Hoffman makes no representations as to the accuracy or completeness of any information derived from such third-party sources and takes no responsibility therefore.

Taylor Hoffman is not a Public Accounting firm, and the information contained herein should not be construed as tax advice. Rather the contents included are a reflection of the view and opinions of the author. There is no guarantee that the information provided fits every situation, and individuals should consult their tax advisor for more specifics.

Taylor Hoffman is not a law firm, and the information contained herein should not be construed as legal advice. Rather the contents included are a reflection of the view and opinions of the author. There is no guarantee that the information provided fits every situation, and individuals should consult their attorney for more specifics.