The Real Cost To Your Family: Having No Estate Plan At All
This is the third in an ongoing series of NLBM articles discussing the true costs and consequences of failed estate planning. The series highlights a few of the most common—and costly—planning mistakes we encounter with clients.
“I won’t care because I’ll be dead,” “I’m too young,” “That won’t happen to me,” or “My family will know what to do.” All of these are reasons why people put off creating their estate plan. However, these thoughts all come from a mix of egoic pride, denial, and above all, a lack of real education about estate planning and the consequences to your family.
Understanding why you need and estate plan is often the first step in creating a proper plan. In the event of your death or incapacity, not having a plan could be incredibly traumatic and costly for your loved ones left to deal with the mess 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 estate plan.
Your family will have to go to court
If you don’t have a plan or only have a will (as mentioned in our second blog post of this series), 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 notoriously slow, costly, and public. 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. 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.
Worse for your family is the massive amount of frustration and anxiety invoked during the process. Even as they grieve your death, plan your funeral, and contact everyone you are close with, they must now dive headfirst into a crowded court system that is a challenge to swim safely through even In the best of times.
Lastly, probate records are completely public, meaning that the contents of your estate, which of your loved ones inherit something, and what and how much they inherit are all public knowledge. This can be dangerous if the wrong sort of people take an interest in your family’s affairs.
You can utilize a planning vehicle to avoid every one of these ordeals. A trust, for example, ensure your assets pass directly to their beneficiaries upon your death without court intervention, so your loved ones don’t have to deal with the time, cost, heartache, and dangers of probate.
You have no control over who inherits your assets
If you die without a plan, the court will decide who inherits your assets, which is determined by our state’s intestate succession laws. These hinge largely upon on whether you are married and if you have children, because 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 go to the state.
It’s important to note that state intestacy laws only apply to blood relatives, so unmarried partners and/or close friends would get nothing. That’s why if you want to control who inherits what, especially if you want someone outside of your family to inherit your property, having a plan is an absolute must.
With this being said, if you’re married with children and die with no plan, it might seem like things would go fairly smoothly. That’s not necessarily true, though, because if you’re married but have children from a previous relationship, the court could give everything to your spouse and leave your children out, or you might be estranged from your kids or not trust them with money, but without a plan the state law controls who gets your assets, not you.
Without the clear guidance of an estate plan, families could end up in a fierce, time-consuming, and expensive court battle over your assets after you die, or if you become incapacitated your loved ones could even get into conflict around your medical care. We see such conflicts all the time even when there’s not significant financial wealth involved, so no matter how much you expect for your family to not engage in such behavior, planning for the worst case scenario is a must.
You have no control over your medical, financial, or legal decisions in the event of your incapacity
As we went over in the first post of this series, estate planning covers far more than simply what happens to your belongings after you die. Yes, planning for your death is a big part of the process, but it’s just as important to plan for your potential incapacity due to accident or illness because 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. Like probate, this process can be extremely costly, time consuming, and traumatic for everyone involved.
We can help you put planning vehicles in place that grant the people of your choice the immediate authority to make your medical, financial, and legal decisions for you in the event of your incapacity, and 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 legal guardians for your kids, it will be left for a judge to decide who cares for your children.
You’d like to think that a judge would select the best person to care for your kids, but it doesn’t always work out that way. Indeed, the judge could pick someone from your family you’d never want to raise them to adulthood. If you don’t have any family or that the family you do have is deemed unfit, your children could be raised by total strangers.
What’s more, if you have several relatives who want to care for your kids, they could end up fighting one another in court over who gets custody. This can get extremely ugly, as otherwise well-meaning family members fight one another for years, making their lawyers wealthy while your kids are stuck in the middle.
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. This is so critical that we’ve developed a free comprehensive system called the Kids Protection Plan® that guides you step-by-step through the process of creating the legal documents naming these guardians.
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. But if it’s important to you who raises your kids if you can’t, you need to give the judge clear direction. On top of that, you need to take action to keep your kids out of the care of strangers over the immediate term, while the authorities figure out what to do if something happens to you.
No more excuses
Given the potentially dire consequences for both you and your family, you can’t afford to put off creating your estate plan any longer. As your Personal Family Lawyer®, we’ll 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. Don’t wait another day; contact us to schedule a Family Wealth Planning Session right away.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
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