Will You Live Forever? It’s A Common Estate Planning Mistake
We’re all mortal, but it’s a hard concept for many to imagine. That’s why many people put off estate planning. Do you really want to put your loved ones through the stress and costs of untangling your estate?
It’s often the experience of a friend or family member who is left to clean up the mess after someone has failed to do any estate planning that makes people aware of how important it is to plan ahead.
CBS Boston’s recent article, “More Money Mistakes: Thinking You Are Going To Live Forever,” reminds us that 50% of Americans with children don’t have a will and almost 75% of adults under the age of 34 don’t have one. According to a recent survey, 32% of Americans would rather do their taxes, get a root canal or give up sex for a month than create or update their will. In addition, more than 40% of Baby Boomers don’t have a will. Three reasons cited by respondents for not having a will are procrastination, believing they don’t need one and cost.
If you have assets that you’ve accumulated, like your home, savings or retirement accounts and you have kids, you have people and things you need to protect.
If you don’t have a will, the court will apply the intestacy laws where you are living at the time of your death to instruct who gets your estate and how it will be divided. Many times, it’s not the way the deceased would have planned it themselves.
If you’re single and have a significant other, and want to have him or her receive your assets, you have to plan. In many states, if you’re single and die without a will, your assets will go to your children, parents, siblings, or cousins—not your partner.
Lastly, the two documents you need while you are alive are a Durable Power of Attorney, appointing a trusted person to act for you in legal and financial matters, if you should become incapacitated due to illness or injury and, secondly, a Health Care Proxy. The Health Care Proxy lets you chose who will make medical treatment decisions on your behalf, if you are not able to do so. Think carefully about who to name for both of these documents. They do not have to be the same person. Speak with them and make sure they are comfortable with the responsibilities that you are asking them to take on.
Reference: CBS Boston (September 26, 2017) “More Money Mistakes: Thinking You Are Going To Live Forever.”