We tend to think that preparing a Will is like preparing to die, and therefore we put it off. Or we think it is just about the “stuff” we own and figure it isn’t worth enough to justify the time and expense of an estate plan. Many think that estate planning is only necessary for the rich, only about taxes, or only about avoiding probate (all good reasons for a good estate plan). The reality is that a good estate plan is the very best gift you can give your loved ones, regardless of your wealth, tax bracket, or probate issues. When you pass away (no, it really isn’t if), they will be grieving. They will be in a state of chaos, wondering what needs to be done, where to start, whether they need help, where to turn for help… A good estate plan gives them a road map.
The truth is, everyone should plan his/her estate. People die unexpectedly every day. While there is a plan set forth by the State for what happens if you don’t leave a Will, you should be sure it matches what you want to do. The State plan is based on what “most people” generally want to do and it has no options. In this day and age, with blended families, special needs, and non-traditional ideas of whom things should be passed to, what “most people” do is often not good enough. The State plan is based on a “traditional family”; to the spouse, to the children, to the parents, to the siblings. No provisions for step-children. No provisions for the unmarried significant other. No provisions for the best friend. No provisions for the family pet.
Above all else, do not simply engage in “self-help” estate planning. This would be such actions as “quit claiming” your house to your child or putting your friend’s name on a bank account. Although these actions can sometimes be appropriate and effective, they can also have catastrophic consequences. You can find yourself homeless and penniless with no recourse. You may also create a taxable event which will create IRS headaches. Even if it can still be undone, it may only make matters worse to do so.
Be wary of the “create your own will” software. It is good as far as it goes, but it doesn’t go very far. It is always best to consult a professional first, and to be sure you have considered all of the factors in your situation. This is not a place where you want to come up short – by the time you know there’s a problem, it’s too late to fix it.
For information on upcoming seminars on this topic, please see our Noteworthy page.