Written By: The American Academy of Estate Planning Attorneys
As the year draws to an end and the New Year quickly approaches, now is the time to think about resolutions and look towards the future. One New Year’s resolution you should consider this year is to think very long term. Instead of just planning for how you can improve life in the upcoming year, the dawn of a new year is the perfect time to create a concrete plan to take care of your family after you are gone.
Here are some statistics to think about: As many as 55% of adults in America have no will or estate plan in place. For minorities, the number is even higher. A full 68% of African American adults and 74% of adult Hispanics have no Will.
Without a plan in place, the state-(not you) gets to decide how your assets are going to be divided. You’ll have no say over who distributes your assets, or over what happens to your property. (You could also cost your heirs some money or leave your heirs fighting about who inherits what.)
So, why don’t more people have a plan? Some don’t know how to create one, while others are hesitant to make the tough choices about how to distribute their assets among those they love. An estate planning attorney can help with the legal process of dividing your assets and can even offer advice on some of the decisions you’ll have to make when planning for life after your death.
Creating Your Last Will & Testament
There are lots of reasons why people need to create a comprehensive estate plan. While around 59% of people who plan for the future do so in order to avoid probate, limiting family chaos is the second most important reason people cite for engaging in estate planning. Protecting children’s inheritances is a prime goal for around 39% of estate planners, while just 34% of people are motivated by minimizing estate taxes.
Whatever your reasons for sitting down with an estate planning attorney, some of the key decisions you’ll need to make include:
- How to distribute assets: Only 27% of Boomers think about how much money they will leave to others. For millennial children, 31% of whom expect an inheritance averaging over $350,000, this lackadaisical attitude by mom and dad may come as a big shock.
- Who will make decisions after your death or disability: You may need to name a Trustee, a personal representative or an executor of your estate as part of your estate plan. You may also want to create a durable power of attorney and designate someone to act as your agent if you remain alive but unable to manage your own affairs.
Both of these issues can be really contentious. For example, as Reuters explains, disinheriting a child could lead to a lawsuit to have your plan overturned (especially if the assets in your estate are large enough to make a case worthwhile). At the same time, sometimes leaving your kids an equal amount is not going to be a fair choice either, especially if you have provided more for one of your children over the course of your life than for the others. One article on USA Today, for example, suggested that parents level the playing field at death if they paid more for one child’s education or if one child took care of them at old age.
When it comes to naming a Trustee, a personal representative, or an executor, family fighting and chaos could also result if you are not clear on your wishes.
Fortunately, an estate planning attorney can help you to overcome the challenges in creating an estate plan. As you consider the future and set your New Year’s resolutions, put it on your list to talk to your lawyer about how you can create a comprehensive plan that will give you control over your assets and avoid fighting among your loved ones after you are gone. So, this New Year’s, make your resolution one you can keep: resolve to make important decisions now about life after your death.