At a time when the economy is slow and money is tight, many people are looking to save money by cutting back on “unessential” expenses—including estate planning. Although this instinct is understandable, the trend is a disturbing one. Our firm understands the need to dig in during tough times, but what you may not realize is that by neglecting to think about your estate planning now, you may be condemning your heirs to expense and losses later.
The greatest fallacy most people have about estate planning is the belief that if they die intestate (or without a will) all of their property will go to their spouse. In fact, it is this belief that keeps many people from creating an estate plan until after one spouse dies. But this is not necessarily true. What happens to your estate depends on many factors, including how you held title to your assets, the state in which you live, whether you have children, your marital status and (sometimes) whether you’ve been married before, etc. And what if the surviving spouse chooses to remarry? There is absolutely no one answer to the question “What happens if I die without a will?” Are you sure you want to take your chances with what might happen?
Another issue that most people just don’t understand is that probate is more often than not a very time consuming and expensive process. There is a good likelihood that your loved ones will need access to your estate in the months following your death; unfortunately, they may not get full access to it as promptly as they would like ! Probate court calendars, legal requirements about informing creditors, the possible need to look for other possible heirs, the possibility that other family members might contest decisions—all of these and more could, in some cases, keep your estate tied up in probate for months or years, and be unavailable to the people who need it most.
And perhaps the least understood drawback to the lack of an estate plan in a down economy is that the probate courts may force your heirs to sell valuable assets at a time when property values are at their lowest. This alone could result in significant losses to the estate that you pass on to your beneficiaries, not to mention probate fees and estate taxes that might have been saved had you planned ahead.
Estate planning may feel like an unnecessary expense, but the more you understand the more you realize just how essential it is. Creating your estate plan now could be the best investment you make for your family’s future.