Estate Planning for Everyday Folks

One of the biggest misconceptions that I hear as an estate planning attorney is that creating an estate plan is just for the wealthy. The timeworn saying that the only two things that are inevitable in this world are death and taxes never had a $ sign or dollar amount in the saying. The problem with the phrase “estate planning” is that it sounds highfalutin because it has the word estate in it. In actuality, estate planning is for everyone–regardless of the size of their estate or even if they have an estate at all!

Let’s start with the basics. Estate planning is giving what you have to who you want in the way you want to do it. It is also about providing contingencies in case you are unable to manage your affairs while you are alive (i.e., become incapable of doing so) and about making healthcare decisions if you are not able to do so. It is not only death time planning, but because incapacities occur during life, it is also lifetime planning.

If you don’t have any significant financial assets to manage then incapacity financial management is even more important. You do not want to spend unnecessary money having a guardian appointed to handle your assets. In North Carolina, for example, if you have not completed a financial power of attorney or if the assets are not owned in a revocable living trust, then a court proceeding will be necessary in order to appoint a guardian to manage your assets for you. The guardianship procedure is complex and time-consuming. Simple, basic contingency documents such as a financial power of attorney make a lot of sense (and cents) to avoid this process.

Our office also helps folks with qualifying for government benefits. This type of planning is not for the wealthy, but rather for those with limited means and resources. The programs are not easy to navigate because the government wants to limit who participates to only those that qualify according to government requirements. One example is qualifying to receive Medicaid which has both asset and income qualification requirements. Advance planning’s desired effects position a person to receive these benefits.

In addition to addressing incapacity and healthcare decision-making issues, estate planning can also address many other non-financial issues such as blended marriages, special needs beneficiaries, addictions, spendthrift or unsophisticated financial management, keepsakes and family heirlooms, etc. You do not need a large business, a large investment account or even what most people think of as an “estate” to make sure that your goals are likely to be achieved with the least amount of administration and expense.

A recent survey by Caring.com reported that 6 out of 10 U.S. adults do not have a will or a living trust. In fact, only 58% of baby boomers (age 53-71) have any estate planning documents. While older adults are more likely to prepare for end-of-life and have a will or living, younger folks (a whopping 78% of millennials) do not have any documents in place — and they should! One only has to remember the unfortunate case of Terry Schiavo, who was kept on life support for 15 years because she had no documents in place to definitively say what she wanted if she was in a terminal condition. If only Terry Schiavo had completed a living will–a simple healthcare document– this unfortunate situation might have been avoided.

We know it is easy to put off or delay estate planning. Thinking about end-of-life situations is not often a top agenda item, but it should be. Strauss Attorneys recommends all adults, of any age, to address their estate planning needs with a professional who can guide them through making sound decisions that suit their particular situation. It does not need to be a complicated process, and it is not dependent on how wealthy you are. Estate planning is truly for everybody– rich or poor, young or old! The best estate plans are those that are periodically reviewed and updated. Don’t delay any more — you and your family and loved ones will be the beneficiaries.