Procrastinating: The Ultimate Estate Planning Mistake
Most people know that creating an estate plan is important for their family. However, most of those people do not feel that estate planning is urgent. No one expects to face death or incapacity today or tomorrow so an estate plan may not seem like a task that needs to be completed now. Unfortunately, procrastinating can have dire effects on you and your family if something does happen.
The old adage of failing to plan means you have planned to fail is all too true when it comes to preparing an estate plan. If you have loved ones who depend on you, either for care or for financial support, lack of a plan can leave those loved ones in the lurch if you are unexpectedly unable to provide that care or financial support.
Minor Children
Minor children must have a legal guardian, which is typically the minor’s parents. But if the parent or parents pass, a court will appoint a legal guardian to, essentially, raise your children. In any estate plan, you would nominate a guardian to serve in that role if one is needed. Without a will, a judge will appoint a guardian. While the judge would, of course, do his or her best to appoint the best guardian for your children, the person who is “best” would be determined by that judge, rather than by you, the parent. It is far preferable to create an estate plan to name the guardian that you believe is best to raise your children in your absence.
Financial Support for Loved Ones
Similarly, loved ones who depend on your financial support may be left without those resources if you do not have an estate plan in place. If someone passes without an estate plan, that individual’s assets are often not available to their heirs for months or years as the estate goes through probate. With proper planning, your assets can be immediately available to your loved ones at the time of your passing.
Who Will Inherit Your Assets?
It is common for people to assume that their assets will be directed to the appropriate loved ones even if they do not have an estate plan. If you pass without a plan in place, any assets you own will pass to your heirs, as determined by state law. Unfortunately, state law can direct assets to individuals that you may not have selected or in a way that is counterintuitive. As one example, in Missouri, the assets of a deceased individual will be divided between a surviving spouse and children, even when those children are minors. Creating an estate plan ensures that your assets are directed to those individuals that you would want to inherit your assets.
Don’t Wait Until It’s Too Late
Putting off your estate planning can, unfortunately, mean you may find yourself unable to prepare a plan if you wait until it’s too late. An individual that lacks legal capacity cannot sign a will, trust, or power of attorney. Failing to face your mortality (or that of a family member) or avoiding making potentially difficult decisions could mean that you’ll find yourself in the heartbreaking situation of no longer being able to prepare an estate plan or help a loved one do so.
Who Can Act On Your Behalf?
For many people, the most important part of an estate plan can be naming the individuals who have the authority to make your financial or medical decisions for you if you are unable to do so. This authority can be particularly important for unmarried individuals or those without adult children.
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Though estate planning can feel like a task that can wait, there is no time like now to prepare a plan. None of us know what tomorrow will bring. Having an estate plan in place can allow you to rest easy, knowing that you and your family will be taken care of, no matter what the future holds.