A recent study by Merrill Lynch and Age Wave found that almost half of Americans over 55, have no idea what will happen to their assets when they die because they don’t have an estate plan or will. People often put off planning their estate because they are not ready to contemplate their morality or to make the difficult decisions about their medical care and treatment in the event of incapacity because of a mental or physical disability. The subject is difficult. However, without an estate plan your family is in for a rough ride.
The study identified stumbling blocks that prevent people from creating a will or engaging in estate planning include:
- Spouses with children cannot agree on who should be appointed guardian in the event of their death.
- Some people find the cost of creating an estate plan costly.
- Some people start the process of creating an estate plan but fail to sign one of the documents or amend them when life-changing events occur, like the birth of a child after the will is created or remarriage by one of the spouses.
The expenses of an estate plan should not be an impediment to creating an estate plan. The cost of disposing of an estate without a last will and testament is the costliest expense your descendants will face when you die. Dying intestate or without a will is subject to court costs, attorney’s fees, valuation fees, and higher taxes, among other costs, diminishing the value of your estate and what your loved ones receive upon your death.
In addition to being costly, the probate process can take months or years to resolve, depriving loved ones of basic support while the process is finalized. In the event of incapacitation, a spouse may not be able to access cash if there is no financial power of attorney if the account is held in the incapacitated spouse’s name.
At minimum, a basic estate plan includes a last will and testament, a living will, a financial power of attorney, a living trust, and beneficiary designations. Only with these executed documents will you and your loved ones be provided for as you wish before incapacitation or death.