Where There's a Will, There's a Say

Did you know that only 46% of Americans have a will in place? According to Gallup, that percentage has remained relatively consistent since 1990, over three decades! If you fall into the other 54% of people who have not gotten around to putting a will in place, you’re not alone.  Maybe you thought you were too young to need a plan, or you’ve known you needed one but just haven’t made it a priority.

Regardless of the reason, no excuse will matter if you become incapacitated or pass away.  You don’t want to lose control of having your wishes fulfilled, nor do you want your loved ones to bear the burden of going to court to advocate on your behalf in probate, or not be able to take care of your children…the list goes on and on.   So, how do you get started? Below are some frequently asked questions when it comes to adding a will to your estate plan.

How bad will it be if I don’t have a plan?

If you don’t have a plan, you lose control.  You don’t get to choose who receives your assets upon your passing and you may not like your state’s default estate plan.  You might be surprised to learn that without a plan your spouse may have to split your assets with your children, and if you don’t have a spouse or children, then your assets will likely pass to your parents and then siblings.

Another downside to not having a plan is that handling your affairs will be more difficult and expensive than if you had a plan in place.  An estate plan prevents the court from needing to intervene to allow your family to care for you should you become incapacitated or to distribute your property upon your death.

Do you have children?

Without a will, it doesn’t matter if you’ve asked important people in your life to be your children’s guardians should something happen to you. If you don’t have a will you won’t get to tell the court who you think would make the best guardians for your children. Even if the court appoints the right people to act as guardians, without a plan you’ve lost the ability to specify how your assets are distributed and used for your children’s benefit.

What is it like to work with an estate attorney?

During your first meeting with an estate attorney, you’ll be asked key questions such as, for example:

  • Do you want your children to inherit equally?
  • At what age do you want your children to control their inheritance?
  • Do you have any concerns about how certain beneficiaries might handle an inheritance; do you want to treat beneficiaries differently?
  • Do you want an inheritance to stay protected from creditors or spouses?
  • Who should make financial and health care decisions on your behalf if you are unable to make them yourself?
  • Who do you want to serve as guardians for your children?
  • Who should administer your plan upon incapacitation or death?

Your estate attorney will help guide you through answering each of these questions, clearing any discrepancies you might have. You’ll typically receive drafts of your documents within a few weeks and once the documents are finalized (including any requested changes you might have), you will be prompted to sign. The last key step of the process is to properly (re)title your assets as instructed by your attorney.

How much does an estate attorney cost?

Attorneys typically charge between $3,500-$6,000 for an estate plan.  While this isn’t an expense anyone wants to pay, it’s far less than what your loved ones would have to pay going through the courts to take care of you or to distribute your assets upon your incapacity or death. Note that the $6,000 plan isn’t necessarily better, but the higher-priced attorney might have more experience with added complexities like incorporating business interests or other unusual assets, or creating additional trusts to transfer wealth at a reduced tax cost, etc.

What documents make up your estate plan?

You’ll need several documents to handle issues that arise upon incapacity or death, which means your estate plan will likely consist of the following:

Living Trust.  The living trust lays out your wishes regarding how property should be managed by the trustees appointed to act on your death or incapacity.  Property in the trust passes outside of the court and avoids the often expensive and time-consuming process of the court distributing property (known as probate). During your lifetime you can transfer asset titles to your trust so that in the event of your incapacity or death, your successor trustee can manage your assets according to your wishes as expressed in the trust.  The trust is amendable as long as you have the capacity to make changes but becomes irrevocable upon your death.

Will.  In states like California, Arizona, and Nevada where probate is difficult and assets are primarily distributed through a trust, a will is still needed.  Your will nominates guardians for your children, an executor to pour assets left out of the trust into the trust, and a conservator to act on your behalf in the event you become incapacitated.

Power of Attorney for Financial Matters.  While the trustee of your living trust will be able to handle most financial matters on your behalf, some actions might need to be taken that are not under the trustee’s control (e.g., signing tax returns or electing or managing retirement accounts). This document allows you to appoint an agent(s) to take specified actions.

Health Care Directive.  This document allows you to appoint the individual(s) to make medical decisions on your behalf and to specify the type of care you want to receive such as pain relief (administered if you are terminally ill or permanently unconscious), your preferences regarding organ donations, and other final arrangements.

Who should know about my estate plan?  Unlike what we see in the movies, it’s in nobody’s best interest to be surprised to learn of their role(s) related to your estate plan. It’s important to ask those you want to serve as key players whether they’d be willing to take on the responsibility. If they are willing, make sure they have copies of key documents appointing them to act on your behalf.

While not always the easiest task to answer these hard questions and get these pertinent documents in place, we know you will feel relieved about getting your affairs in order. If you’d like to speak to an estate planning specialist, click here – we are more than happy to help.


Important Disclosure: This content is for informational purposes only. Opinions expressed herein are subject to change without notice. Beacon Pointe has exercised all reasonable professional care in preparing this information. Some information may have been obtained from third-party sources we believe to be reliable; however, Beacon Pointe has not independently verified, or attested to, the accuracy or authenticity of the information. Nothing contained herein should be construed or relied upon as investment, legal, or tax advice. Only private legal counsel may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement the design discussed herein. An investor should consult with their financial professional before making any investment decisions.

[1] In states where probate, the court-supervised process of distributing wealth, is not exceedingly time-consuming and expensive you may only have a will and not a trust.

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