Q. I just saw that it’s Estate Planning Awareness Month! We had our estate planning documents done through your firm a couple years ago. I’m trying to convince my sister and parents to do the same, but they have some objections, claiming that estate planning is daunting, expensive, and only for older, richer people. How can I convince them that these things are simply not true, and that estate planning is important for everyone and one of the best things you can do for yourself and your family? Thanks for your help!
A. Thank you for trusting our firm with your estate planning! These misconceptions are held by many, so hopefully we can help clear up some of the confusion, so your family stop harboring these misconceptions and can understand the importance of estate planning, being well-prepared in advance, and gaining the peace of mind it brings.
And, as you mentioned, there is no better time for your loved ones to start thinking about estate planning than right now, with October being Estate Planning Awareness Month. Each October, across the US, individuals and families are reminded of the importance of creating and/or maintaining an estate plan. By preparing an estate plan, you’re safeguarding more than matters of finances and inheritance; you’re guiding future health decisions, providing for loved ones, and creating a legacy!
You may be surprised to know that the three things that you mentioned are what most families get initially wrong about estate planning, which often prevents them from taking action, according to CNBC. What most people don’t realize is that a few simple steps today will give them the peace of mind that they are well-protected for the future.
Let’s look at the three myths you mentioned and what you can discuss with your loved ones when it comes to the importance of estate planning:
Myth: “Estate Planning Is Daunting”
Even though most parents plan to leave at least something to their children, only 37 percent said they currently have a plan in place for transferring their wealth. The reason many of these families give for not planning is that they dread talking about money, especially financial plans, a recent Wells Fargo report found. In fact, roughly 26 percent of adult children would rather deal with their parents’ estate after they die than talk about it while they are living. Further, 19 percent said they don’t mind receiving nothing at all, as long as they don’t have that talk with their parents.
Few people like to think about death or what will happen before or after death. However, as much as someone may dislike the thought of death, they probably wouldn’t want to condemn their family to the time, expense, and mess that a lack of planning will inevitably create. While discussing end-of-life planning may seem morbid to some people, an estate plan can protect you and your assets not just after you die but during your life as well, as I will explain.
Losing a close relative is hard enough without the added and completely avoidable hassles that occur in the absence of estate planning. And, the truth is, estate planning is not as daunting as you might think. If there are people that you love, getting estate planning in place is a way to make their lives easier. Focusing on the benefits involved in estate planning for you and your loved ones may be just the motivation you need to either create and finalize an estate plan or update the plan that you already have.
These benefits include:
- Estate planning/Incapacity planning involves communicating your final wishes when you are no longer around or no longer of sound mind, and deciding who will carry out these wishes;
- Estate planning can help minimize taxes;
- Estate planning protects those you love, including minor children, special needs children, and even pets;
- A complete, up-to-date plan will spare your loved ones pain and expense;
- Good estate planning typically includes having a funded living trust, meaning a trust created while you are living, in order to avoid the nightmare of probate;
- A Last Will and Testament must go through probate in order to function, so having just a Last Will and Testament to distribute your assets after your death is generally not a good idea, as your estate will still generally go through the nightmare of probate.
For more details, please read my recent article “Why Are People So Afraid of Estate Planning?”
Myth: “Estate Planning Is Only for Older, Wealthier People”
Estate planning isn’t just for wealthy older people; it’s an opportunity for people of any age and in any financial situation to control who will inherit their money and property, and to decide who can make medical and financial decisions on their behalf during their lifetime if they’re unable to do so themselves. Whether you’re in your 20s, 40s, 60s, or 80s, estate planning will give you control over financial and medical decisions. Even young people just starting out should have some key documents to make their wishes known if anything happens to them.
Estate planning is about making sure of three things: your finances are taken care of if you’re incapacitated; your health care decisions are carried out the way you’d like even if you’re not able to make them; and your children and other heirs are taken care of when that time eventually comes. Estate planning is for anyone who may become seriously ill or die. In other words, it’s for everyone.
Your estate-planning needs change throughout your life – starting when you’re 18 and legally an adult, then making benefits decisions at your first job, getting married, having kids, accumulating more assets over time, and preparing for the next generation to inherit your estate. If you’re a senior or ill – or have parents that are in this life stage – you will want to be sure that you have your Estate Planning and Incapacity Planning and Long-term Care Planning documents in place, as well.
For more details on estate planning throughout your life, please read my article “Estate Planning for Every Stage of Life.”
Myth: “Estate Planning Costs Too Much”
Despite the expense of hiring an attorney for assistance drafting documents, estate planning actually helps to save time and money in the long run. Without a good estate plan involving a living trust, your heirs/beneficiaries will have to go through probate, a lengthy and expensive process. On a national average, the probate process takes from 5–8 percent of your family estate out of the hands of your beneficiaries and gives it to lawyers, accountants, courts, and other outside individuals! Your loved ones may also have to pay unnecessary taxes, fees, and expenses that could have been avoided with a proper estate plan.
Estate planning is not a luxury that only the wealthy can afford. It’s an important process that can help protect your loved ones and ensure that your wishes are carried out if you are ever incapacitated, or after you pass away. With the potential cost savings of avoiding probate and the peace of mind it brings, estate planning is more affordable than you might think. Don’t let the myth that estate planning is too expensive prevent your loved ones from creating a plan that will ultimately bring them protection and peace of mind!
Estate Planning Protects Those You Love
We here at the Farr Law Firm have strategies in place to help all types of people at all ages to plan for themselves and their loved ones. By planning in advance, each person can retain the assets it has taken a lifetime to accumulate and the peace of mind that their family’s needs will be adequately and properly addressed. If you or members of your family have not done Incapacity Planning, Estate Planning, or Long-term Care Planning, or if a loved one is beginning to need more care than you can handle, please contact us as soon as possible to make an appointment:
Northern Virginia Estate Planning: 703-691-1888
Fredericksburg, VA Estate Planning: 540-479-1435
Rockville, MD Estate Planning: 301-519-8041
Washington, DC Estate Planning: 202-587-2797
About Evan H Farr, CELA, CAP
