Three Words of Advice from a Louisville Lawyer with 25 Years Probate Experience: “Estate Plan Now.”
Probate is the process of distributing a person’s estate after their death, and the Stages of Probate are initiated immediately upon death. Estate planning is the process of determining how your estate will be distributed after your death, according to your wishes. As Mahatma Gandhi succinctly stated, “The future depends on what you do today.” This is the essential tenet behind the relationship between Planning and Probate. As Probate is usually more time, expense and stress than expected (even when it goes well, and while grieving a loved one’s death), Estate Planning is not the time, expense and stress that most people expect, and some or all stages of Probate can be avoided altogether in Estate Planning, as summarized in this short Forbes article. In short, Estate Planning is a gift to your loved ones. We know this, so why would we hesitate?
Why Avoid Estate Planning?
This US News artcle, 6 Common Myths About Estate Planning, has it right. Too many people avoid and delay estate planning because of these assumptions, and mostly because it’s not a priority, as we all have plenty more time to do that later, right? We sadly become too aware of how premature that assumption is, as more parents, parents of friends, and our own friends suddenly pass away with little or no reason to have expected it. The value of Estate Planning is usually expressed by the family of those who did take care of it, with the simple expression, “He/she always took care of his/her family, now even after death. Everything was arranged.”
Here are those common “myths” about Estate Planning, with additional commentary:
- A Will Covers Distribution of Assets
A Will is indeed part of Estate Planning, but it doesn’t cover all distribution. For some people, it might not cover much at all, as a Will can’t direct distribution of assets that aren’t wholly owned by the decedent. There are many other aspects of Probate not covered in Wills, and you don’t know what’s not covered until you have that discussion with your Financial Planner and Estate Planning Attorney.
- I Have to Get My Assets in Order First
Anything can and will happen. What happens when your assets (however simple and few or complex they may be) aren’t in order, and decisions have to be made? Living Will, Health Care Proxy, Durable Power of Attorney, Power of Attorney. What is the difference, and which are most needed in your case, considering what’s known and not known about your physical and mental status and health?
- I Can Do That Later
Even if you just finished college, got married, started your first career job, and had your first child (congratulations!) … a basic Will, even with very few details, is critically important. Who do you want to be Guardian of your child in the event of your (and partner’s) untimely death? How would you like your assets distributed, even if few? Look at it this way; when you have very little to arrange, your Will and Estate Planning will be fast, easy and very affordable. Most importantly, it’s a start, which you revise as you go.
- I Can’t Change an Estate Plan
Yes you can.
- An Estate Plan is Too Complicated to Set Up
Estate Plans are not as complicated as you think. Most can be completed in two meetings, and then you schedule time periodically to review and revise. An Estate Plan is never more complex than the Probate Process that occurs in the absence of an Estate Plan.
- Estate Planning is for the Wealthy
Photos, family heirlooms, prized personal possessions, trusts and stocks, and money of any amount. All are forms of wealth, and none more important than the other when it comes to giving. What’s important is that planned distribution will avoid friction and decisions that your loved ones would prefer you decided instead of them.
Why Now? Look at Generational Distribution of Wealth.
U.S. distribution of wealth between generations is very important to understand at this time. According to a 2018 Forbes Article, The Graying of Wealth: “In 2016, the median net worth of American households was $97,300, up 16% from 2013 after adjusting for inflation. Mean net worth also rose nearly 26% to $692,100. But the fruits of the recovery have been spread unevenly across different age groups. Faring the best were the 75+—an age bracket largely occupied by the Silent Generation (born 1925 to 1942). This group experienced a 32% increase in median household net worth and a 60% increase in mean net worth. Today, the net worth of a typical retiree is $264,750. This amount shrinks moving down the age ladder: The Silent hold roughly 1.3 times the amount of wealth as Boomers, more than twice that of Xers, and 23 times that of Millennials.”
Think about that. There is unprecedented and potentially perpetual value of today’s estate planning decisions, resting on the always-reliable shoulders of the “Silent Generation.” Similarly, according to a June 25, 2019 Brookings article, Six Facts About Wealth in the United States: “From 1989 to 2016, the median net worth of families with a head of household age 65 or older increased by 68 percent. Over that same time period, the median net worth of families with a head of household age 35 or younger decreased by 25 percent.” The article mentions that decreasing wealth in the Millennial Generation is largely due to increasing amounts of education debt, so the question becomes, what will be the aggregate return on this investment?
Estate Planning is personal. It’s a balance of responsibility, care, sentiment, recognition, and investment. Impact can be eternal through a grant to charitable organizations and education. Estate Plans will be inherently different from one family to the next, but all planned estates have one thing in common: they will most likely require less time, stress and cost of Probate compared estates without a plan.
Graham Whatley offers 25 years of experience as a Probate and Estate Planning Attorney to provide guidance, efficiency and thoroughness in the Estate Planning process. Extensive experience in related practice of Elder Law, Wills & Trusts, and Guardianship become your advantage in completing your Estate Plan with assurance of having your wishes and assets secured.