When Aretha Franklin died in August 2018, she left her four sons an estate worth an estimated $80 million – and no instructions on how to divide it. Although most adults know they should have an estate plan, only 40% actually do, opening the door to misunderstanding, hurt feelings and unintended consequences. Here are four reasons people give for not creating an estate plan – and why this tool deserves a second look.
"I don’t want to think about my death."
- Unfortunately, we all have to come to terms with our own mortality. Consider it a gift to your loved ones, helping to alleviate their burden during an already difficult time.
- An estate plan is more than a set of instructions denoting who gets what. Whether you’re establishing an advance healthcare directive or power of attorney, denoting guardianship for a young child or taking advantage of certain tax benefits, an estate plan can have a tangible impact on your life right now.
"My family will straighten it out."
- They might not get the chance. In the event someone dies intestate (without a will), the courts will decide how your possessions will be divided. This process can be lengthy, public and result in decisions that run counter to your values.
- By establishing a will, you can spare your loved ones hurt feelings and in-fighting – feuding that has been known to divide families for years.
"I’m in good health – I can put it off for a while longer."
- Every adult, regardless of age or health, should have an estate plan. Even if you have family members who lived into their 100s, good genes won’t necessarily protect you from an unexpected misfortune or medical event. Creating a plan is a crucial part of preparing for the unexpected.
"I don’t need a will – everything will just go to my spouse when I die."
- That really depends on where you live. Different states have different rules around dividing an estate without a guiding plan – especially if you’re divorced, have stepchildren or own property in other states.
- Assets aren’t the only things that get passed on. Depending on the laws of your state, some debts can get passed on to your heirs. An estate plan lets you address paying off debts without burdening your loved ones.
A thoughtful estate plan can support the people and causes you care about and remove a tremendous burden off people you care about. If estate planning is something you’ve been putting off, there’s no time like the present to get started.
Your Baird Financial Advisor can help ensure your estate plan is in line with your evolving family and financial circumstances. Not a Baird client? Find a Baird Financial Advisor.