1. “I don’t have an estate. Why would I need the services of an estate planner?”
You may not own a second home, or even a first one, but chances are you have an estate and just don’t realize it. A house, household furnishings, motor vehicles, art work, investment accounts, stock options, comic book collections, and anything else that you own is part of your estate. By this definition, we all have an estate, even if it is just a bicycle and a running balance in a bank account.
The common misconception is that only the wealthy can benefit from the services of an estate planner, but the process of estate planning is customized to match your individual needs, and accommodate an estate of any size. Even the most basic estate plan can ensure that you have a Durable Power of Attorney in effect, for making both medical and financial decisions in case you become incapacitated. It could also provide at least a will, which lays out your final wishes as to the division of assets among family members and friends. From there, based on how complex your asset portfolio or family may be, you can build and protect your assets during your life, and after.
2. “I’m too young to need any estate planning documents. That’s not something that I need to worry about until I’m older.”
If you are old enough to have “big kid” responsibilities such as home ownership, parenthood, managing financial investments, or running a business, you are certainly old enough to begin putting together an estate plan. It’s not the age of a client that dictates their need for estate planning, it is their asset portfolio and the family surrounding them that matters most.
Life throws us curveballs. Some day, you may realize that you have never been, and never will be, invincible or clairvoyant. There is no minimum age for when undeservedly bad things happen to you and completely upend everything in your life. Not that I want you to spend your time living in fear, but when you have a family or business depending upon you, wouldn’t it be nice to know that there is a game plan in place in case something happens? The answer is: yes.
3. “I drafted a will from a free online template. That’s good enough, right?”
With the advent of the internet and immediate access to information, we know just enough about a lot of things to be a danger to ourselves and others. Although drafting your own estate planning documents isn’t as ill-advised as, say, extracting your own wisdom teeth with nothing but a crescent wrench and a YouTube video, there is a reason why most people would seek the advice of an estate planning attorney first.
It’s not that I doubt your intellect to fill out an online will template, and it’s not because I am a glutton for punishment and took not one, but two different state bar examinations, earning the privilege to call myself a lawyer. It’s just that, during my time as an attorney, I have seen the end results of self-help legal services that are neither pretty nor cost effective to try to clean up after the fact.
Drafting your will does guarantee that you have something in writing…and something is better than nothing. But if it’s not the right something, if it isn’t drafted properly, or doesn’t include the necessary language to accomplish what you think it does, you are better of spending your time refining your home dentistry skills.
There are plenty of day-to-day tasks that you can do with out the professional assistance in order to save money. You can mow your own lawn, clean your own car, dye your own hair. When it comes to drafting documents that will nominate the guardians of your young children and provide for their wellbeing if something happens to you…at the very least take what you have drafted to an attorney for review. Your family deserves at least that much consideration.
4. “My children have a great relationship, so I trust that should anything happen to me, they will be able to handle my affairs without any conflict.”
No. No, they won’t. If there were any positive correlation between the strength of a family’s relationship before and after an estate administration, I would be out of a job. There is nothing like a little residual sibling rivalry, mixed with raw emotion caused by the loss of a parent, and sprinkled with money to incite a first class Battle Royale.
Even a carefully drafted estate plan won’t entirely eliminate the possibility that someone will have their feelings hurt by your directives. It can, however, serve as evidence of your intent and can stop a lengthy litigation in its tracks.
No relationship has been made stronger or better by years of litigation. If you aren’t specific about whom you want acting as your trustee/executor/agent, and what percentage of your assets go to each of your beneficiaries, your name may be come synonymous with a four letter word in the eyes of your family. If you care about your children, and wish for their relationships to flourish as they grow older, draft a specific estate plan and talk to them about it when they reach the appropriate age.
5. “Estate Planning attorneys are expensive and I can’t afford to hire one.”
Some attorneys cost more than others, but that doesn’t mean that there aren’t affordable attorneys providing high quality estate planning services. Nor is it worth the risk of not hiring one (see Myth #3 above).
I encourage people to do their footwork when looking for an estate planner in their area. Ask for referrals from trusted friends, co-workers, or professional advisors. Meet with a few attorneys to get a sense of those with whom you will feel most comfortable. The estate planning process is fairly invasive and personal, so you want an attorney who you trust.
As part of this interview process, inquire as to price (hourly, flat fee for packages of services). Most attorneys, including myself, offer new estate planning packages at a flat fee. I prefer this method because I can spend more time educating my clients on the documents that we are drafting and neither party is watching the clock. The price range will vary, depending on your region (San Francisco tends to price higher than, say, Sacramento or Lake Tahoe), so it’s a good idea to shop around.
Keep in mind, estate planners provide a service that is intended to save your estate sometimes tens of thousands of dollars in probate, litigation, and tax expenses. It may be a big initial out of pocket expense, but peace of mind and saving your family money and time later on are invaluable investments.
For more information on the estate planning process and the services offered by KJS Law, please join us on Wednesday, June 18th at 5:30 PM at Tahoe Mill Collective (150 Alpine Meadows Rd, Tahoe City, CA) for Drink Responsibly: An evening of beers, brats, and basic insights on financial and estate planning. More information can be found here.