In 2008, Congress highlighted the need for the public to understand the importance of estate planning and passed House Resolution 1499, designating the third week of October as National Estate Planning Awareness Week. According to a 2021 survey conducted by Caring.com, however, only 33 percent of adults in the United States have estate planning documents, such as a will or trust, even though about two-thirds viewed such documents as somewhat or very important. Many respondents blamed their lack of estate planning on procrastination. Others mistakenly said that estate planning is not necessary because they do not have many assets.
Why should you have an estate plan?
An estate plan provides peace of mind by ensuring your money and property are protected and handled the way you want. If you become ill or die, your accounts and property will be passed down according to your wishes.
What should you consider in an estate plan?
Do you have a last will and testament or a trust? Suppose you do not have these important documents. In that case, state law will determine who will inherit your property, and it may not happen the way you would have wanted. In addition, someone appointed by the court, instead of a trusted person of your choosing, will be in charge of caring for children or pets and winding up your affairs. Spelling out your wishes in a will or trust prevents unnecessary confusion, anxiety, and expense for your loved ones when you are gone.
- Make sure you have powers of attorney. A financial power of attorneydesignates an individual to make financial and property decisions (signing a deed, opening a bank account, etc.) if you become unable to handle your affairs. A medical power of attorney designates a person you trust to make medical decisions for you if you are unable to speak for yourself.
- Ensure that you have an advance directive, aka living will, which spells out your wishes concerning your end-of-life care.
- Do you have insurance? If you become incapacitated or die, your family or loved ones need to have information about your insurance (such as health, long-term car, disability, life) so they can file necessary claims. Having the right amount of coverage is important in case you become ill or die, leaving behind loved ones who rely on your financial support.
- Compile a list of your accountsand other important information that will be needed to manage your accounts and property while you are incapacitated or to settle your affairs after you are gone. Keep this information in a safe place known only to a few trusted family members or loved ones. This list should include at least the following information:
- bank and investment accounts
- titles to vehicles and homes
- credit card accounts or loans
- social media accounts and passwords
- Social Security card, passport, and birth certificate
How can you urge your loved ones to create an estate plan?
Estate Planning Awareness Week is a great opportunity to take steps to make sure your own estate plan is in place. Talk to your loved ones, especially elderly parents, about creating an estate plan. Estate planning can be a difficult topic to discuss because it brings the unpleasant topics of aging and death to the forefront.
- Be sensitive to your loved ones’ feelings. Put yourself in their shoes and keep in mind that few people are eager to dwell their own death. Talk first about the need to plan for an illness and provide instructions if they become too ill to communicate with doctors or handle financial matters for themselves. The conversation can progress naturally to the importance of having an estate plan that will transfer their money and property in the way that they wish, provide for the care of dependents or pets, and minimize any taxes, court costs, and legal fees. Enforce that you are not trying to control their decisions but only want to ensure that their own wishes regarding their medical care and property are known and that all of their instructions are in writing to guarantee that they are carried out.
- Involve others in the conversation. If you are planning to speak to your parents about the need for an estate plan, try to include siblings in the discussion to avoid giving the impression that you are attempting to influence or control your parents’ choices. You and your siblings should emphasize to your parents you are not asking about what you will inherit, but you just want to make sure their wishes are carried out if they become ill or pass away.
Consult an experienced estate planning attorney
An experienced estate planning attorney with Austin and Pethick can help you and your loved ones create an estate plan tailored to your needs. We also can help you update an existing estate plan. Austin and Pethick can help you put a plan in place that will prevent unnecessary stress, legal expenses, and taxes, in addition to uneven inheritances, disputes among loved ones, and delays in passing life savings on to them. We are right there with you to provide the peace of mind that comes with knowing your plans are in place for your care and legacy.
Contact Austin and Pethick today to find out more about estate planning for yourself or a loved one.