Estate Planning

Estate planning can be a very difficult process because it forces us to confront our mortality. We all know, on some level, that death will come, but planning for it can make it a little too real and bring the subject too close for comfort. 

For others, though, I find that they don’t think that they need to meet with a qualified estate planning attorney because they are operating under certain myths. Are any of these preventing you from creating an estate plan?

Myth #1: Estate Planning is for the Wealthy

When we read about an estate planning story in the news, it is often about a rich celebrity who died without a will or who surprised the disinherited kids by leaving it all to the family cat. The topic catches people’s attention (and judgment): these sorts of people should have done proper planning because they have so much! By comparison, when the average person thinks about their own property and planning needs, they assume that it is not necessary because they do not have anything close to these fortunes.

This is the most common myth in estate planning!

Estate planning is about more than just money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses who will serve as guardian for your minor children and who will manage their inheritance for them and on what terms. 

It also addresses who will make medical and financial decisions for you during your life if you become incapacitated and can no longer manage your own affairs. 

If you have not done any of this planning, a court will have to appoint people to assume these responsibilities. This can be very time consuming, expensive, and public. It can also wreak havoc on a family if they disagree about who should be appointed and how decisions should be made.

Even for people with modest assets, who gets your hard-earned savings when you die is an important consideration. Without any planning, state law will decide who gets what. Whatever your legacy is, you should be the one directing it, not the State.

Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything

Many married couples own property jointly. Under most forms of joint ownership (although not all), when one spouse dies, the surviving spouse automatically becomes the sole owner of the asset by operation of law, without probate. In most cases, this is the desired outcome.

However, this approach has its drawbacks. First, it may not be the optimal way to reduce estate taxes. There are certain planning opportunities available to married couples if your combined estate is above or near the estate tax exemption level that allow your assets to benefit the surviving spouse during his or her life, but do not involve leaving everything outright to the surviving spouse.

Second, what if, after you die, your spouse gets remarried? If the surviving spouse takes everything outright at the first death, then he or she can spend it all or leave it to the new spouse without any consideration for your wishes or your children. 

Estate planning does not mean that you have to disinherit your spouse (that’s another topic entirely…). Rather, it means the two of you can sit down and plan out what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.

Myth #3: I’ll Save Money by Doing my own Will

It is no secret that there are a number of online options now for creating your own estate plan. And the cost to obtain draft estate planning documents online is without question a whole lot less expensive than engaging an experienced attorney.

If we are looking at this as a question of what the upfront costs are to get a set of documents, then the DIY estate plan wins this round. But, is the initial price tag the right way to assess costs? Of course, I am going to suggest that it is not.

When you work with an experienced attorney, you get the benefit of her human insight and knowledge about practical estate planning issues that are critical to effective documents. You get follow up questions based on the wince you made when you were asked about your mom’s health. You get real life examples when you ask, “what does it mean to be deemed ‘incapacitated’ in Maine?” You have someone who can verify if you actually own a part of the family camp that your parents may have mentioned over Thanksgiving years ago, and advise you on what your options are to pass it on to your children. You also have someone to make sure you sign your documents properly.

All of these examples point to traps that DIY estate planning sets for the unwary. And, unfortunately, your loved ones are the ones who bear the cost for mistakes, either in the form of confusion, delay, or attorney’s fees incurred during probate litigation (or, often, all of the above). 

Estate planning is a process whereby you make important decisions about you and your loved ones and memorialize those decisions in clear, legally-effective documents. It is not just a product you grab off the shelf and hope one size fits all.

A DIY estate plan may cost less up front, but it doesn’t mean it’s less expensive in the long run.