3 Estate Planning Hurdles
May 07, 2021
Fact: When you pass, you will leave behind an estate, and somebody will need to settle it. Your estate may be worth a little or a lot, but none of us can escape death and taxes.
So why do so many families put off essential estate planning until it’s too late? In my experience, there are three hurdles:
Hurdle #1: Deciding Who Gets What. Who’s going to get grandma’s pearls? Will your heirs inherit equal or different amounts? What are your charitable intents, if any?
Hurdle #2: Making It Legal. Will a will suffice, or should you have a trust? Who will serve as executor(s) and/or trustee(s)? Which roles can friends or family members assume; which are best left to professionals? What complications might require extra planning?
Hurdle #3: Getting It Together. Do key family members know where your estate planning documents are stored? How about your financial accounts, and other essentials like your safety deposit box, house keys, logins, etc.?
If your wealth is modest and your wishes are straightforward, you might be able to leap all three hurdles on your own. But more likely, it’s worth engaging an estate planning attorney to assist. Either way, estate planning is almost always worthwhile. Advantages include:
- Clarity: Your actual wishes are far more likely to be realized if they’re in legally binding form.
- Speed: Your estate is likely to settle more quickly with fewer frustrating delays for loved ones.
- Cost Savings: Faster settlement also translates to fewer costs.
- Tax Benefits: You can often ensure a more tax-efficient wealth transfer.
- Protection: By addressing potential problems in advance, distributions are less likely to end up in the wrong hands.
- Support: Perhaps most importantly, a well-structured estate plan can reduce your loved ones’ stress load during an already stressful time.
Of course, it’s possible to skip all this. If you die intestate (without a will), your state’s laws typically govern who gets what from your remaining assets and liabilities, and who gets to settle your estate. There also are default beneficiaries for your Social Security benefits and retirement accounts.
But make no mistake: If you do nothing, you’re still doing something. It just may not be the “something” you and your loved ones would prefer. Bottom line, having a will is almost always the better way to go.
John A. Frisch, CPA/PFS, CFP®, AIF®, PPC™ founded Alliant Wealth Advisors in 1995 and has over 30 years of experience as a financial professional. In his free time, he’s an avid long-distance runner, a sport that requires discipline, patience and vision. John applies these same skills to his professional pursuits: He helps families and retirement plan sponsors adopt a patient, disciplined approach to overcoming financial challenges and reaching their distant goals along a clear path. Learn more at www.alliantwealth.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.