There are many common refrains of people who put off creating their estate plan, or who refuse to do so altogether. They may say that they're too young and they'll do it when they're older. Some people say they won't care about what happens to their assets because they'll be dead anyway. Some assume that their family will know what to do. Some even think they are not “wealthy enough” to need an estate plan.
These beliefs come from a mixture of pride, denial and a lack of knowledge about estate planning and the consequences of not putting measures in place. Once you understand exactly how planning is designed to work and what it protects against, you'll realize that an estate plan is a crucial and necessary step not only in taking charge of your assets, but also safeguarding your loved ones from hardship in the future.
The first step in creating a proper plan is to thoroughly understand the potential consequences of going without one. In the event of your death or incapacity, not having a plan could be incredibly traumatic and costly for both you and your family, who will be forced to deal with everything you've left behind.
While each estate and family are unique, here are some of the things most likely to happen to you and your loved ones if you fail to create a plan.
Your family will have to go to court
If you don't have a plan, or if you only have a will (yes, even with a will), you're forcing your family to go through probate upon your death. Probate is the legal process for settling your estate, and even if you have a will, it's quite often a slow, costly, and public process. With no plan at all, probate can be a true nightmare for your loved ones.
Depending on the complexity of your estate, probate can take months, or even years, to complete. And like most court proceedings, probate can be expensive. In fact, once all of your debts, taxes, and court fees have been paid, there might be nothing left for anyone to inherit. And if there are any assets left, your family will likely have to pay hefty attorney's fees and court costs in order to claim them.
Consider the fact that in addition to grieving your death and planning your funeral your family will be forced to deal with the complexities of the court system that can be challenging to navigate even in the best of circumstances. Consider also that court proceedings are open to the public and your loved ones will be robbed of being able to handle an intimate family matter in private.
That said, the expense and drama of the court system can be almost totally avoided with proper planning. Using a trust, for example, we can ensure that your assets pass directly to your family upon your death, without the need for any court intervention. As long as you have planned properly, just about everything can happen in the privacy of our office and on your family's own time.
You have no control over who inherits your assets
If you die without a plan in place, the court will decide who will inherit your assets. The court's orders may be contrary to your true desires and may not even be in the best interests of your loved ones. Who is entitled to your property is determined by your state's intestate succession laws, which hinge largely upon whether you are married and if you have children.
Spouses and children are given top priority, followed by your other closest living family members. If you're single with no children, your assets typically go to your parents and siblings, and then more distant relatives if you have no living parents or siblings. If no living relatives can be located, your assets will go to the state.
With an estate plan, you have the power to take charge of your destiny instead of leaving it in the hands of a judge who does not have you or your family's best interests at heart. Consider that state intestacy laws only apply to blood relatives, so unmarried partners and close friends would get nothing. If you want someone outside of your blood relatives to inherit your property, having a plan is an absolute must.
Even if you are married with children, several challenges may arise if you die without an estate plan. Let's say you are married but have children from a previous relationship. In this scenario, the court could give everything to your current spouse and leave your children out. In another instance, you might be estranged from your children or spouse or not trust them with money, but without a plan, they would inherit your assets upon your death.
Dying without a plan could also lead to your loved ones being forced into an ugly court battle over who has the most right to your property. If you become incapacitated, your loved ones could even get into conflict over your medical care. It's easy to think that this could never happen to your family, but emotions are high during such a stressful time and conflicts are known to happen. In our own practice, we have seen families torn apart, even when there's little financial wealth involved.
We can help you create a plan that handles your assets and your care in the exact manner you wish, taking into account all of your family dynamics, so your death or incapacity won't be any more painful or expensive for your family than it needs to be.
You have no control over your medical, financial, or legal decisions in the event of your incapacity
Most people assume estate planning only comes into play when they die, but that's simply not the case. Although planning for your eventual death is arguably the most substantial part of the process, it's just as important to plan for your potential incapacity due to accident or illness.
If you become incapacitated and have no plan in place, your family would have to petition the court to appoint a guardian or conservator to manage your affairs. This process can be extremely costly, time-consuming, and traumatic for everyone involved, during an already difficult time.
At North County Legal, we can help you put mechanisms in place that grant the person(s) of your choice the immediate authority to make your medical, financial, and legal decisions in the event of your incapacity. We can also implement planning strategies that provide specific guidelines detailing how you want your medical care to be managed, including critical end-of-life decisions.
You have no control over who will raise your children
If you're the parent of minor children, the most devastating consequence of having no estate plan is what could happen to your kids in the event of your death or incapacity. Without a plan in place naming a legal guardian for your kids, a judge will be entitled to make the decision as to who gets custody, care and control of your children. Depending on the judge's decision, this can have devastating consequences for your children and your entire family.
If there are several relatives who want to care for your kids, this can lead to a nasty custody battle in court. This can have lasting emotional effects on your children, who are still in the process of grieving the death of a parent.
With this in mind, if you have minor children, your number-one planning priority should be naming legal guardians to care for your children if anything should happen to you. At North County Legal, we have devised a Kids Protection Plan that guides you step-by-step through the process of creating the legal documents naming these guardians and putting other safeguards in place for your children.
Naming legal guardians won't keep your family out of court, as a judge is always required to finalize the legal naming of guardians in the event of death or incapacity of parents. Naming the guardian of your choice is your way of providing the court with clear directives during this process so that there will be no debate as to who the most ideal guardian would be for your children.
The time is now.
Given the potentially dire consequences for both you and your family, you can't afford to put off creating your estate plan any longer. At North County Legal, we will guide you step-by-step through the planning process to ensure you've taken all the proper precautions to spare your loved ones from needless frustration, conflict, and expense.
The biggest benefit you stand to gain from putting a plan in place is the peace of mind that comes from knowing your loved ones will be provided and cared for no matter what happens to you. Don't wait another day—contact us to schedule an appointment, so you can finally check this urgent task off your to-do list.