For the most part, people agree that estate planning is important and necessary. After all, if you don’t specify what happens to your money, your assets, and even your children after you die, someone else will.
Unfortunately, many people die without having an estate plan in place. According to Gallup, a little more than half of Americans die without having a living will. And more than 70% of Americans do not have an up-to-date will.
So what stops people from putting their estate plan in place? Here are some of the most common holdups, and how to get past them:
1. You think estate planning is morbid
No one wants to think about dying and leaving their family and loved ones to deal with their estate. So many people end up dying without an estate plan in place because they assumed they would have more time.
It’s morbid, it’s not fun, and no one wants to spend time preparing for their death.
If procrastination is getting in the way of your estate planning, it might be a good idea to change your perspective.
Instead, think about preparing your estate plan as peace of mind. If something were to happen to you, your children or loved ones would be cared for the way you want them to be. As much as we don’t want to think about it, the truth is that no one knows what will happen tomorrow.
2. You think it will be time-consuming or expensive
Estate planning can be time-consuming or expensive, but it can also be incredibly simple. It all depends on the size of your estate and how thorough you want to be.
If you’re worried about expense, there are more affordable options – like DIY wills and online legal documents – that can help you get it done. This is a starting point, and it’s better than nothing. However, it doesn’t replace the value and expertise of working with an attorney.
On the other hand, if you mostly want to offload the work of setting one up, a lawyer can walk you through it and help you create the will you want.
Either way, there are options to set up your estate plan in a way that makes sense for you.
3. You didn’t sign your documents
You would be surprised how many people create a will or other estate planning document, but forget to sign it. It happens frequently, especially with DIY estate planning.
So here’s your reminder: If you drafted your own will or other estate planning document, make sure you and your spouse have signed everywhere you need to. Keep in mind that each state has its own set of rules for this, and some states require witnesses for signing. Look up your state’s rules here.
4. Other considerations: You haven’t titled your accounts
A lot of people think that just having estate planning documents is enough, but if you haven’t titled your accounts, then you still have some work to do.
There are some common ways to title your accounts, and each one can determine how your estate plan is carried out. These apply for non-retirement or life insurance accounts, like bank and brokerage accounts:
- Individual accounts – This titling puts one person or entity in charge of a will. Their estate will be dealt with as they’ve indicated in their will.
- Joint tenants with rights of survivorship – This is a common option for married couples. It indicates that if one spouse dies, the account passes directly to the surviving account holder.
- Tenants in common – Assets are considered equal among tenants in common. This is a preferred choice for shared accounts that will be handled with a will.
- Convenience account – Available in certain states, convenience accounts allow for multiple account holders. That might come in handy if you want to designate someone to have some access to an account – maybe to pay bills or manage investments – but you don’t want them to inherit the entire account. [include link for more information and which states allow it]
- Payable on death or Transfer on death – This titling allows the account owner to transfer an account directly to a beneficiary without going through probate.
A note about beneficiaries: Make sure you review your life insurance and retirement account beneficiaries every few years, or when major life events happen, like births, deaths and marriages. You want to make sure your beneficiaries match your estate planning documents, and that if you need to add or change a beneficiary, you do that right away.
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes you too should have access to financial resources and fee-only financial planning. For more information on the services offered, contact Katie today.
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