The top 10 excuses people use to avoid creating an estate plan.
1) I don’t have enough assets to require an estate plan.
When I talk to some people about estate planning, they look at me like I’m crazy. They say, “My last name is Jones, not Rockefeller. I’ve got a simple life with modest assets. I don’t need estate planning.”
A good estate plan is critical to protect even modest assets. You really don’t need much to benefit from a good plan. Remember, the transfer of your assets is just one piece of estate planning. If you have children—even if you don’t have a dime to your name, you need a plan.
2) I don’t want to think about dying.
Thinking about our estate plan forces us to acknowledge our mortality. We must consider who will receive our assets, who should raise our children, if we want to be cremated, who should make the decisions if we become incapacitated, or if we want to be on life support—and other gloomy issues.
I don’t like thinking about death either, but the thought of my child being placed in the wrong hands, my wife watching me suffer on life support, or of having the wrong person make life or death decisions for me motivated me to get off the couch and create an estate plan. Let’s face it—thinking about dying a little or a lot will not influence how long you live. Providing for your loved ones isn’t always easy. Burying your head in the sand and hoping it “works out for the best” will make it harder for you and for your family. You don’t need to dwell on your estate plan—just make sure you do it.
3) I’m single and don’t have children so I don’t need an estate plan.
Young, single, or childless individuals frequently use this excuse. “If I don’t have anything and I’m not responsible for anyone, what’s the point of an estate plan?” Under the traditional view of estate planning, this might be the case, but not any more.
Even if you don’t have assets or care where they go, a proper estate plan can help you while you are alive. Later in the chapter, you will learn about several types of estate planning documents that can literally save your life.
Even if you don’t care at all about where your money goes, you need a basic estate plan. Don’t assume your assets will go to those who need it most. Your state’s default estate plan has a plan for your money. It’s up to you to tell them differently.
4) I’m too young for an estate plan.
You probably feel good and are in excellent health. It may be decades before your estate plan will be needed. Why worry, plan, and pay for something that you won’t need for 10, 20, 40+ years?
Think of your estate plan as an insurance policy. Chances are you will pay for homeowner’s insurance, year after year, and never use it. But would you consider canceling the insurance policy protecting your largest asset? The only difference is that your estate plan will eventually be used. It’s not a question of if, but of when. Why gamble with your family’s security when you can quickly and easily create an “insurance” policy that will provide for them?
5) Once I’m gone, I don’t care what happens.
I call this the hotel room syndrome. Do you ever notice that when you stay in a hotel, you make a bigger mess? I’ve seen hotel rooms that look like a tornado has hit them after only one night! Towels end up on the floor. The newspaper is strewn about. The blankets and pillows end up in a corner. Food is left out. The rationale is, “I’m leaving tomorrow and somebody else can deal with this mess.” Would you behave differently if your children, parents, or spouse were maids at the hotel and had to clean your room?
The last thing most people want is to make their death even harder on their loved ones. At a time of intense sadness and confusion, don’t you want to make the administrative stuff as easy as possible on your family? Don’t leave a big mess for someone else to straighten out—create a simple estate plan to help your loved ones.
6) I don’t know what I want to put in my estate plan.
An estate plan will force you to answer many questions. Who gets your assets? How much do they get? Who should take care of your children? The fewer of these difficult questions you can answer, the less valuable your estate plan will be.
You will not be expected to have all of the answers when you begin creating a plan. These are important issues that will take time to consider. If you wait until you have all of the answers, you will never start your continuation plan. In fact, most people discover that questions come up during the planning process that they never would have considered. If you are worried you might not have all of the answers, get started anyway. Even if you can’t answer a single question, at least it gets you thinking and moving in the right direction.
7) My life is in flux, so I’ll just wait until things have settled to start my estate plan.
Maybe you have a new baby on the way or are getting married. Maybe you’re selling a business, buying a house, or getting a divorce. It can be tempting to want to wait to start your estate plan until your life settles down. Why go through the hassle of completing a plan if you know you will need to change it a year from now?
If your life is anything like mine, chances are there will always be something on the horizon that will change things. Change is the only constant. If you wait for everything to be in place, you might be waiting a long time. I always suggest starting now—regardless of what lies ahead. Once you get your estate plan in place, it will be easy to modify it. Rarely would you have to start over. Live like you will never die but plan as if you will die tomorrow.
8) Creating an estate plan is too costly.
Like so many things in life, you can choose instant satisfaction or you can invest in something that will return riches later. An estate plan that covers the basics will cost between $500 and $1,500—depending on the complexity of your situation.
While I’m sure there are other things you’d rather do with $500, I can’t think of any way to use that money that will have more important results than creating a customized estate plan. I don’t think there is anything that will pay off in dollars, convenience, and peace-of-mind more than an estate plan.
9) I don’t have the time for estate planning.
We have a lot of priorities tugging for our time. Not too many people jump out of bed excited about planning their estate. Unfortunately, we often neglect important—but not necessarily urgent—activities in the rush of our daily lives.
Estate planning is rarely an urgent activity, but always an important one. If you spend all of your time putting out fires, you will never get around to those things that are simply smoldering until it is too late. The good news is that in the time it takes to watch a movie, you could have the professional help you need to create a customized estate plan. That’s it! Your estate plan can be in place in just a couple of meetings. We all have the same number of hours in a week. Invest a couple of these hours into creating your plan—it is time well spent.
10) I don’t want my kids to be spoiled.
This is a real concern for many parents. “I worked hard for my money,” they say, “and I want my children to work hard too.” Warren Buffett summed it up nicely when he said, “I want to leave my children enough so they can do anything, but not so much that they can do nothing.” This is a common concern among families with wealth. Like my friend from high school, money—in amounts both small and large—can de-motivate.
If you’re putting off your estate plan because you don’t want your kids to get too much too soon, the only solution to your problem is to create your own plan. As explained above, if you use the default state plan, your kids will receive 100% of their inheritance as soon as they turn 18! If you’d prefer for your children to be older when they get their inheritance, to donate part of your estate to church or charity, or to fund your grandchildren’s education, you must design your own plan.
The proceeding blog post is an excerpt from The Six-Day Financial Makeover: Transform Your Financial Life in Less Than a Week!, available now on Amazon.
About the Independent Financial Advisor
Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.