I recently conducted an informal survey amongst my family and friends with respect to estate planning.  I asked two main questions.  The first was, Do you have an estate plan?  The second was, Why?

My goal was to be able to compile a "top ten" or "top five" reasons why or why not.  Some of the answers didn't surprise me. Some of them did.  My surprise, I think, was primarily based on who the responses were coming from.  Not because anyone I surveyed falls into the category of the "uber-wealthy," nor because anyone falls into the category of "totally destitute."  We are, for the most part, middle-classers - Average Joes just trying to survive from day to day and year to year.

I was also surprised that, when it came to why someone does not have an estate plan, the answers actually fell neatly into five main categories.  Before I provide the answers, let me begin by qualifying what I mean by "estate plan."  I mean some legal vehicle or mechanism whereby provisions have been made to distribute assets or care for individuals in the event of your death.

That said, the top 5 reasons why an estate plan has NOT been done were:

1. Time - either too busy, or just haven't taken the time to understand what can or should be done.

2. Lack of Assets - either there are no assets, or the respondent did not feel like there were enough assets to justify doing anything about them;

3. Cost - either the cost seemed to outweigh the benefit, or just assumed the cost would be prohibitive within their current budget.

4. Lack of Understanding or Education - either didn't know what estate planning really entails, or there was some lack of understanding with respect to a particular law or set of laws;

5.  Outdated Estate Plan - have an estate plan or some estate planning mechanism that has not been reviewed for a long time.  *I placed this under the reasons why an estate plan is NOT done because an outdated estate plan, in some instances, could be just as bad as not having one at all.

In reality, there are probably as many reasons why people don't have an estate plan as there are people.  We're all different.  Our lives and circumstances are different.  Our reasons will be different.  But these are a few of the most reliable excuses that I found.

Today I will talk about Reason #1 - Time.  In subsequent posts I'll address the other four.  But for now let's explore our busy lives and routines.

I read another, very well written, blog today.  The title was "The 'Busy' Trap."  What a great article.  It talks, generally, about how we sacrifice our daily existence for being "busy."  How we use the term "busy" like a badge of honor.  And the response we get when we respond to the common inquiry, "how are you doing?" with "Busy!" "So busy."  "Crazy Busy." is usually something of a congratulatory compliment: "That's a good problem to have."  Like we're saying, "Congratulations on being so busy that you don't have time to talk to me."  Its weird when you think about it.

Truthfully, when was the last time we felt good about being blown off?  "So busy," as a response, personally, puts me into a mode where I feel like I shouldn't be taking any more of that person's time.  Or makes me feel rushed and unimportant.  Yet, in general, we congratulate and compliment people for it.  It's almost like saying, "thank you for making me feel stupid for taking your time."  But, I digress.

Anyway, the point is that the busyness of everyday life often gets in the way of accomplishing those things that are most important.  I have heard it said (although I do not recall an exact source) that very few people on their deathbed will remark, "I wish I had just been able to <insert the mundane daily/business task of your choice here>."  Many, however, will remark, "I wish I had spent more time with <insert the person's name, or group of people, of your choice here>."   The point is, when we truly reflect on what is important, people and relationships almost always are where we end up.  The time we did spend.  The time we didn't spend.  The care of those people who are most important to us.

In truth, estate planning takes very little time, but has the ability to bless or curse our heirs well into the future.  Depending on the complexity of your particular circumstances, that time will vary.  Time invested could range from one hour to 20 hours or more.  However, the time invested is not likely to leave you questioning how your spouse, children, or grandchildren will be cared for.

I once worked with a client whose spouse had passed away.  The dying spouse - who had a terminal disease - had literally spent his final few days preparing tax returns in an effort to leave all affairs in good order and to care for his wife.  It truly was touching.

The point being, time is really all we have.  Don't fall into the "Busy" Trap and forget what is most important - time, relationships, and caring for those we love.  Take the time.  Make the time.  Speak with an estate-planning attorney in your area to understand what vehicles make sense for your situation.  An adequate estate plan  - be it a simple will or a complex trust - is really our final way of saying, "I love you," to those we care about (the Leona Helmsleys of the world aside).



DISCLAIMER: This website is for Informational Purposes only.  The information provided is not comprehensive, does not constitute legal advice, and does not create an attorney-client relationship.  If you need legal advice, please contact an attorney in your local community or State.

In my last post I said that I would talk about estate planning vehicles that may be appropriate for different stages of life - Early Adulthood, Mid-Life, and Empty Nest/Retirement.  In the interest of keeping it concise, I've decided to provide only a bulleted list with brief explanations.  Some of the items are identical from one stage of life to the other - I apologize, upfront, for the additional length, but it seemed better to be able to hit a section and get all the information than to say "See above" and make readers scroll all over the page to get to the information.

Also, by way of explanation, probate assets are those that are subject to administration by a probate court in order to re-title them into the name of your intended heir, beneficiary, or devisee.  Non-Probate assets are those that do not require court administration for re-titling.  Some examples of non-probate assets are: 1) accounts that have a named death beneficiary (for example life insurance); 2) jointly held accounts/property; and 3) assets owned by a Trust.  

 

Early Adulthood:

Life Situation:

Not a lot of assets.  Young.  Healthy.  Immortal.


Estate Planning Considerations:

- Will - a simple will stating how you would like assets devised may be sufficient. If your probate assets are substantial, a revocable trust may be a better option - in which case, refer to the "Mid-Life" section below.

- Health Care Power of Attorney - This designates an agent to make Health Care decisions for you if you are unable to decide for yourself.

- Living Will - to put it not-so-delicately, this determines whether and when you want the plug pulled if you are on life support.

- Mental Health Care Power of Attorney - this designates an agent to make mental health care decisions if you are mentally incapacitated.

- Health Care Directive - In Arizona - as with many other states - you can put your Living Will, Health Care Power of Attorney, and Mental Health Care Power of Attorney on file with the State.  The State then provides a wallet card.  Assuming no other options are available and you are unable to communicate your wishes, the hospital may access your information from the State registry.

- Final Disposition Instructions - this is merely a written set of instructions respecting whether you wish to be buried or cremated, where you want to be buried, how you want your ashes cared for, and so on.



Mid-Life:

Life Situation:

Building assets.  Married/Domestic Relationship.  Children.  Less-Immortal.


Estate Planning Considerations:

- Trust - Usually a revocable living trust is an appropriate vehicle at this stage, but other trust options may also be warranted.  A revocable trust is one that can be revoked at any time by the Grantor/Trustor/Settlor (i.e. - the person who set up the trust; i.e. You).

- Pour-over Will - This type of will has the effect of moving property that does not belong to the Trust before your death into the Trust after your death.  A Pour-Over Will will also include provisions for guardianship of minor children and other important elements.  This Will will need to be probated, but may be simplified greatly if assets that would otherwise be "probate assets" are properly transferred to your Trust.

- Durable Power of Attorney - This is a Power of Attorney that gives very broad powers to the person you elect.  Generally, this gives your agent the power to step into your shoes and act - in a legal sense - as you in virtually every situation.  For example, to manage your personal finances, to manage a business, to buy and sell property, etc.  Generally, because of the amount of power given, I recommended using a "springing" power of attorney.  "Springing," means that it only becomes effective after a certain event.  Typically the "event" is mental or physical incapacity.

- Health Care Power of Attorney - Who makes Health Care decisions for you if you are unable to decide for yourself.

- Living Will - To put it not-so-delicately, this generally is the document used to state your wishes with respect to whether and when you want "the plug" pulled.

- Mental Health Care Power of Attorney - Who makes care decisions if you are mentally incapacitated.

- Health Care Directive - In Arizona - as with many other states - you can put your Living Will, Health Care Power of Attorney, and Mental Health Care Power of Attorney on file with the State.  The State then provides a wallet card.  Assuming no other options are available and you are unable to communicate your wishes, the hospital may access your information from the State registry.

- Final Disposition Instructions - This is merely a written set of instructions respecting whether you wish to be buried or cremated, where you want to be buried, how you want your ashes cared for, and so on..


Empty-Nest/Retirement:

Life Situation:

Growing assets.  Married/Re-Married.  Children.  Grandchildren.  Mortal.


Estate Planning Considerations:

- Trust (Revocable or Irrevocable - again, the choice depends on how trust assets are to be distributed to beneficiaries, the size of the estate, and other considerations).  Being more firmly established, it is easier to see what your estate involves, and also to determine exactly where and how you want your estate distributed.  The most appropriate option should be discussed with your estate planning and tax attorney to ensure the best outcome.

- Pour-over Will - This type of will has the effect of moving property that does not belong to the Trust before your death into the Trust after your death.  A Pour-Over Will will also include provisions for guardianship of minor children and other important elements.  This Will will need to be probated, but may be simplified greatly if assets that would otherwise be "probate assets" are properly transferred to your Trust.

- Durable Power of Attorney - This is a Power of Attorney that gives very broad powers to the person you elect.  Generally, this gives the person to step into your shoes and act - in a legal sense - as you in virtually every situation.  For example, to manage your personal finances, to manage a business, to buy and sell property, etc.  Generally, because of the amount of power given, I recommended using a "springing" power of attorney.  "Springing," means that it only becomes effective after a certain event - usually if you become mentally or physically incapacitated and can't do things for yourself.

- Health Care Power of Attorney - Who makes Health Care decisions for you if you are unable to decide for yourself.

- Living Will - To put it not-so-delicately, this determines whether and when you want the plug pulled if you are on life support.

- Mental Health Care Power of Attorney - Who makes care decisions if you are mentally incapacitated.

- Health Care Directive - In Arizona - as with many other states - you can put your Living Will, Health Care Power of Attorney, and Mental Health Care Power of Attorney on file with the State.  The State then provides a wallet card.  Assuming no other options are available and you are unable to communicate your wishes, the hospital may access your information from the State registry.

- Final Disposition Instructions - this is merely a written set of instructions respecting whether you wish to be buried or cremated, where you want to be buried, how you want your ashes cared for, and so on.



DISCLAIMER: This website is for Informational Purposes only.  The information provided is not comprehensive, does not constitute legal advice, and does not create an attorney-client relationship.  If you need legal advice, please contact an attorney in your local community or State.