Estate Planning Procrastination Can Cost You Thousands
Updated on Jun 26 2019
Putting off estate planning can have a huge impact on financial and medical options, costing you or your estate money, leaving important end-of-life care decisions unstated, and even causing family stress and broken relationships. Learn more about why procrastinating estate planning is a major financial mistake and why you should do it now, when you have the financial and mental bandwidth to make difficult decisions about your legacy.
5 Myths Causing People to Delay Estate Planning
Here are some of the top fallacies people make when doing estate planning:
1. I am not rich enough to have an estate plan.
If estate planning was ever only for the rich, that is not the case anymore. Today many middle-class families have benefited from success in the stock market or a good real estate investment and need to plan for the passing of a family breadwinner. A main component of estate planning is designating heirs for your assets and a plan will ensure that your legacy goes to each heir the way you deem appropriate.
2. I will have the mental capacity and longevity to deal with estate planning later.
For many, estate planning means facing the hard but inevitable truth that everyone passes. It can be a scary time and one many people do not want to talk about. The earlier that you can reconcile the inevitability of the end of your life, or the fact that you may receive a diagnosis that leaves you legally unable to make legal and financial decisions, means that your estate is secure if something should happen unexpectedly.
3. Estate planning will cause me to lose autonomy and threaten my independence.
Some adults fear that estate planning will mean they lose their authority over personal care, living arrangements, and other aspects of senior care. Understandably, seniors want to maintain autonomy and independence for as long as possible. The best way to ensure this is to do estate planning now, while you can still provide input for senior care and end-of-life care. Having a conversation with family members about financials and care is important to be prepared for the future.
4. Attorney fees for estate planning are too expensive.
There is no doubt that attorneys are expensive, and there are substantial fees to have an attorney draft an estate plan. Most lawyers will charge a flat fee of around $1,000 to write a will and do other basic estate planning documents. That may seem substantial, but when compared with the cost of having an ambiguous estate plan that can result in more attorney fees and higher income taxes for your beneficiaires, paying an attorney is almost always the cheaper option.
5. Choosing how to divide my estate now will cause family fights.
Many older adults support their adult children or grandchildren financially. If your estate plan is likely to upset family members who are used to your financial support, having clarity, knowledge, and detailed planning earlier can help families process your decisions and plan accordingly. It will be worse fighting over your assets in court, paying more attorney fees, and potentially damaging family relationships.
Ultimately, estate planning is about protecting your assets and protecting your family. While often avoided, it is crucial to execute estate plans earlier rather than later for families to have open communication, peace of mind, and financial freedom.
The best way to make your estate plan is to meet with both a financial expert and an attorney who can walk you through your options and provide a financial assessment that will meet your needs. Financial planners can give you insight into estate taxes and even serve as a third-party negotiator for complex family dynamics. Connect with a fiduciary financial advisor to preserve your legacy through estate planning.
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