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 (with a ‘trill’) 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, it is easy to procrastinate when it comes to actually setting your affairs in order. Here are the top 7 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 specifically geared toward estate planning for Millennials. (Or you can substitute “Millennials” for “Gen Z” or whatever weird thing we are on now.)
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.
Young people are not alone in feeling this way, when it comes to estate planning. It’s easy to procrastinate creating an estate plan when so few of us are actually on our death beds. And until we 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 though 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 picking up the pieces if you don’t plan your estate.
2. “I don’t want to think about death.”
Talking about dying — even indirectly through estate planning — makes a lot of people uncomfortable. I am sure there are complicated, evidence-based psychological explanations for why it does, but I think it all comes down to a belief (perhaps subconscious) that talking about death will somehow hasten it. “Speak of the devil, and he shall appear” and all that jazz.
Maybe you are different. Maybe you just prefer to focus on lighter things than death. 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 (or at least for a while).
3. “I only have one child, so there won’t be a fight over my estate.”
There are a few problems with this line of thinking. First, avoiding a “fight” over your estate is not the only reason to have an estate plan. (Though now is probably a good time to mention that I wrote an in-depth article about how to lawsuit-proof your estate plan.)
A good estate plan also addresses how your beneficiaries will receive their assets (all at once? in annual portions? only after a triggering condition? after submitting to a drug test?), who will administer your estate, who will take care of you when you can no longer take care of yourself, and much, much more.
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? For that reason, you should consider nominating a guardian or trustee to manage your child’s inheritance for a time.
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? An estate plan can avoid lengthy, traumatic litigation by nominating a guardian for your minor children in advance.
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.
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. “My estate isn’t big enough to warrant an estate plan.”
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.
But aside from the practical advantages of passing on assets or providing for your own lifetime care, an estate plan (properly created with the guidance of a qualified attorney) also has the benefit of leaving less of a mess behind that your loved ones will have to clean up.
Understand that 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, we recommend that clients draft an estate planning letter of instruction when organizing their affairs. Imagine that, after you die, you could stand over your family’s shoulders (but not in a creepy, ghost-like way) and walk them step-by-step through the process of settling your estate. 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. Remember: estate planning is not just about deciding who gets your assets after your death; it involves organizing assets and information in a way that makes it as simple as possible for your friends or loved ones to manage your estate.
However, estate planning is not nearly as painful as it sounds. It can be as simple as merely holding an estate planning fire drill and talking to your family about how to manage your estate. That isn’t a very robust plan and might not do much to transfer assets or avoid disputes, but it is better than nothing.
I, for one, try to make the planning process as painless as possible. In 95% of cases, I can get everything I need to prepare estate planning documents from a one-hour consultation (which is free, by the way) and an information form filled out by the client. Then it’s just a matter of having the client review the documents and tweaking them based on further email or phone conversations.
Think about it this way: From start to finish, we could be done — and you could have an estate plan — in a little more than a week.
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:
However, there is no “one size fits all” approach to estate planning. So 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.
Stop procrastinating and get an estate plan.
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 could suffer the consequences.
To talk with one of our attorneys about creating or updating your estate plan, contact the experienced Oklahoma City estate planning attorneys at Postic & Bates for a free, no-obligation consultation.
David M. Postic is an attorney at Postic & Bates, P.C. While he has experience in a wide array of areas, he focuses his practice on estate planning, probate and trust administration, real estate, adoption, and business planning.
You can email David through our Contact Us page or by calling our office at (405) 691-5080.
[As with all our posts, the contents of this article do not constitute legal advice and are subject to our site-wide disclaimer.]