Planning for what happens after we’re gone isn’t exactly a fun topic of conversation. It’s essentially trying to navigate through a maze of paperwork, legal jargon, and tough decisions—all while contemplating your mortality. Many of us put off writing a will or setting up an estate plan because, well, life gets busy, and dealing with these things can feel overwhelming and non-urgent. But here’s the thing: having a plan in place isn’t just about who gets what when you’re gone. It’s about making sure your wishes are known, your loved ones are taken care of, and you have peace of mind knowing everything is in order. So, let’s dive into why some folks hesitate to tackle estate planning and why it’s worth facing those challenges head-on.
Why do so many people avoid estate planning?
Ever wondered why so many people put off writing a will or setting up an estate plan? The heart of the matter is that it’s not just about avoiding paperwork. Ultimately, it’s about tackling tough questions and facing the future.
- Complexity Concerns: Some folks think estate planning is too complicated to tackle on their own. For example, what on Earth is a living will versus a trust versus a power of attorney? Sounds overwhelming…
- Avoiding Talk About Death: Planning for what happens after you’re gone can be uncomfortable or just plain scary. Some people would prefer to avoid it altogether.
- Cost Concerns: There’s a belief that estate planning is expensive, especially if you need professional assistance. (Spoiler alert: There are affordable options nowadays).
- Assuming Everything Will Work Out: Some people think their assets will automatically go to the right people without a will, which isn’t always true.
- Family Drama: Complicated family dynamics or disagreements over inheritance can make it hard to make decisions. For instance, if you have biological kids versus step-kids, and you have a complicated relationship with your biological kids but a great relationship with your step-kids.
Overcoming these reasons often involves taking small steps, getting informed, and possibly seeking help from an estate planning attorney who can guide you through the process.
What are the risks of not having an estate plan?
Not having a will or estate plan can cause a bunch of headaches, all of which are completely avoidable with an estate plan. But, if you’re still not convinced (you little rebel, you!), let’s take a look at some of the main issues that can arise if you don’t have an estate plan in place.
Uncertain inheritance
If you kick the bucket without a will, your state’s default laws decide who gets your stuff—not you. Without a will, you lose control over who inherits your assets, and they might end up with people you never intended.
Let’s say Sarah, a single mom with two kids, unexpectedly passes away without a will. In her state, the rules of intestate succession would kick in. Sarah’s estate would be split evenly between her two children since she doesn’t have a surviving spouse. If Sarah had no kids but her parents were still alive, her estate might go to them. If Sarah had no spouse, kids, or living parents, then her estate might trickle down to her siblings, nieces, or nephews under state law.
“Intestate succession” means the state decides who gets what, which might not match Sarah’s wishes if she had gotten around to writing a will (and so should you!)
Family feuds
No clear instructions can lead to fights among family members about who gets what, potentially wrecking relationships. For example, if you are in your second marriage and you also have kids from a previous relationship. The kids and the second spouse may get into a court battle over certain assets if they unintentionally go to the wrong person, and there are unclear estate plans.
Probate pain
Your estate goes through probate, a legal process that’s slow, expensive, and eats into what you leave behind. Probate is the legal process through which the estate of a deceased person is administered and distributed. On average, probate typically lasts from several months to over a year. Yikes!
Let’s say Uncle Bob passed away without a will, leaving his estate to be sorted out by the state’s probate process. It could take up to a year and a half for the court to appoint an administrator, gather all of Uncle Bob’s assets, pay off his debts, locate any surviving relatives, and then finally divvy up what was left among these relatives. Want your family to avoid this painstaking process? Create your estate plan today!
No specified guardian for your kids
If you have children, a will lets you pick who’ll take care of them. Doing this ensures your kids will be in good hands, even if you’re not around to take care of them. Without a will, the decision is up to the courts.
But, isn’t my spouse automatically entitled to inherit my assets even if I don’t have an estate plan?
Yes, with an asterisk. Without an estate plan, your spouse’s potential inheritance depends on your state’s laws and whether you have children together or children from previous relationships.
Intestate succession
If there is no will, state laws of intestate succession determine how the deceased spouse’s property is distributed. Typically, a surviving spouse receives a significant portion or all of the estate, depending on whether there are children or other relatives, unless the spouse waived their right to an elective share in a prenup or postnup.
Community property states
Nine states are classified as community property states, including California, Texas, and Arizona. In community property states, assets acquired during the marriage are generally considered marital property. When you pass away, the surviving spouse typically inherits their share of the marital property automatically.
Let’s say Tom and Jane are married and live in California, a community property state. Unfortunately, Tom passes away suddenly without a will. During their marriage, Tom and Jane accumulated assets together, which are considered community property. This includes their home, savings, and investments. In this case, Jane is generally entitled to half of the marital property automatically upon Tom’s death, regardless of whether Tom left a will.
The other half of the marital property typically goes to Tom’s estate. If Tom had children from a previous marriage or other relatives, they may have a claim to this portion under intestate succession laws. To avoid this outcome and ensure your property goes where you want it to, it’s important to create a will or estate plan that clearly outlines your wishes while you still have the chance to do so.
Common law states
The majority of states follow common law property rules. In these states, half of the assets do not automatically transfer to the spouse, as it does in community property states. This means marital assets aren’t automatically shared; each spouse’s separately owned property remains theirs unless it’s jointly titled or commingled.
Here’s an example of how inheritance might unfold for a surviving spouse in a common-law property state like New York: John and Mary are married. John unexpectedly passed away without leaving a will. John owns a house and a retirement account solely in his name, which is considered his separate property under New York law. Without a will, New York’s intestate succession laws come into play. These laws typically entitle Mary to a portion of John’s estate, including a share of his separate property. Mary would likely be entitled to a significant portion of John’s separate property, such as the house and retirement account, depending on whether they have children or other surviving relatives.
Do I have to hire an attorney to set up an estate plan?
Not necessarily! Whether or not you require the services of an estate planning attorney hinges on your specific situation and personal preferences. If your financial situation is simple with few assets and beneficiaries, you might consider using online tools such as Trust & Will or basic templates to create a will and other documents.
On the other hand, if your estate is more intricate, like if you have multiple properties, investments, businesses, or blended families, an estate planning attorney can offer customized advice and solutions to ensure your wishes are accurately documented and carried out.
The main takeaway of not writing a will
Not having a will or estate plan can create a lot of chaos for everyone involved. It means your stuff might not go where you want it to, and someone you wouldn’t necessarily pick might end up in charge. Plus, things could drag out in court, costing your family time and money. It’s just not worth leaving your loved ones guessing and arguing when a little planning can make sure things go smoothly. Taking the time to sort out your will and estate plan ensures your wishes are followed and your family’s future is secure. It’s your way to look out for them even when you’re not around.
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