According to various studies, it is commonly thought that 55% of Americans do not have even a will. Indeed many of those individuals and families likely have failed to plan due to a common misconception that we encounter in our offices, to-wit: estate planning is only for the rich.
That myth couldn’t be further from the truth. If you have assets, and/or if you have people that depend on you, you need to plan! Consider the following issues:
(1) Minor children – Everyone with minor children needs, at minimum, to name guardians for their children.
(2) Beneficiary Designations – For many, life insurance death benefit beneficiary designations may control how most of their wealth passes. But are these designations current, and do they pass all of the property as the client desires? Often times minor children are named as beneficiaries with disastrous consequences. (Call us; we can tell you some stories.)
(3) Home Ownership – If you own your home (even if it is mortgaged, even if it is modest), you have an estate that will require full probate at your death or incapacity if you do not plan accordingly. We recommend the use of trusts to keep real estate out of the hands of county government at your death or incapacity.
(4) “Affluence” – The government likes to pick on “rich” dead people. Currently “rich” is defined as a deceased person worth more than $5.3-ish million (it is adjusted for inflation, and so that number changes from year to year). In the past, that number has been much lower (well under $1 million). Have you planned for the contingency that, at your death, the government will think that you and your family are “rich”?
(5) Special Circumstances – Those with special circumstances (e.g., a special needs child, a spendthrift grandchild, charitable interests, etc.) definitely need an estate plan.
(6) Powers of Attorney and Health Care Directives – All responsible people over the age of 18 (with, of course, the capacity to sign) need durable powers of attorney and health care directives.
Remember that estate planning is not permanent, and if circumstances change plans can be updated. But it’s better to have something in place when needed than nothing at all.