The statistics are rather alarming. In 2005, 50% of Americans had a Last Will and Testament; today, only 32% have one. Meanwhile, only one in three Americans over the age of 55 has a durable power of attorney, and a mere 41% have their advance health care directives.
Why is this? According to statistics culled from a range of sources, Americans lack doing their estate planning for the following reasons:
- 47% say “they haven't gotten around to it”
- 29% think they “don't have enough assets to leave to anyone”
- 49% don't believe their assets are worth enough to worry about estate planning
Other common explanations include being too busy, thinking estate planning is only for “old” people, and not wanting to think about the inevitability of death.
If you have a car, a house, or a bank account you have an estate that requires planning. If you are over the age of 18, you need do planning. Estate planning isn't just about what happens to one's assets after death, it's about taking care of you doing your life and staying in control of one's life. For example, tomorrow you could get hurt in a car accident or have a stroke at age 44 and not be able to work anymore; or you could work hard and want to make sure you protect you and your family; or you have children from different relationships that you want make sure inherit from you. Everyone can benefit from having a proper estate plan that meets their needs and goals.
At the very least, your plan should include all of the following:
Last will and Testament
A Last Will and Testament allows you to accomplish a few important goals. You can name your beneficiaries and specify the assets you want them to receive; name a guardian for your minor children, if any; and choose the person you want to settle your estate through the court system (known as the executor or personal representative).
Power of attorney for health care decisions
Also known as a health care proxy or health care surrogate, this important legal document allows you to name a person you trust to make health care decisions on your behalf if you are no longer able to make them on your own.
Power of attorney for legal and financial
A power of attorney for finances is similar in concept to a power of attorney for health care. It allows you to designate another person to make decisions about your finances, such as income, assets, and investments, when you can longer make them yourself.
By executing a living will, you express your wishes regarding what medical treatments you want, or do not want, in an end-of-life situation. A living will differs from a power of attorney for health care in that it details your specific wishes, whereas a power of attorney for health care allows someone else to make health care decisions for you.
If you want your loved ones not to have to go to court after your passing, trust planning is an excellent way to achieve this goal. Not only do you save your loved ones time and money, which by the way is coming out of your estate, but you also can protect your loved ones by the planning you do within your trust. For example, trusts can stipulate when and under what conditions your heirs will receive their inheritance, which is helpful if you think your children and other heirs are not mature enough to manage an inheritance. Moreover, you will not know what your heirs' financial situation is like when you pass; it may be that they are being sued for a car accident or business gone wrong, going through a divorce or a bankruptcy. Do you want your lifelong earnings to be lost to your heirs' financial troubles or do you want to help your heirs receive their inheritance? Lastly, an irrevocable trust can protect your assets during your life against threats like long-term care costs, divorce, creditors, lawsuits, and more.
Estate planning can help you accomplish many other goals as well. As you can see, proper planning allows you to seize complete control of your affairs while you are alive and after you pass away.
Do not hesitate! Call 239-529-8731 to find out how we can help you achieve your goals.