“The best way to get something done is to begin.”
- Author Unknown
Financial planners often tell their clients that it is never too early to invest in a 401(k). Similarly, estate planning is an important life responsibility that should not wait until tomorrow.
Procrastination is the primary cause of inadequate estate planning. This is especially true in the years when we are attempting to grow our wealth. Our thinking is that our financial picture is incomplete and that we need to wait until it is more fully developed. Yet, a revocable trust, if chosen, can be adapted to changes in circumstances during your life. And because it becomes irrevocable at your death, you will have peace of mind knowing that the important purposes for which you envisioned the inheritance – everything from providing for basic needs to funding a college education – will be met.
Parents with minor children should have an estate plan because it is the only legal way to designate guardians should parents die before their children reach adulthood. If you have not prepared an estate plan that incorporates your intentions, state law will determine what happens to your property, including the custody of your minor children. Of course, if there is a surviving parent, he or she is the default guardian. What is your plan, however, if there is no surviving parent or if the surviving parent is an ex-spouse that has little, if any, capability for managing the minor or the minor’s inheritance?
An estate plan is not simply a way to distribute your assets at death. Equally important are legal documents that assist with managing your health and wealth in case of incapacity. These documents include an advance medical directive and a durable power of attorney. They express your wishes and identify whom you have empowered to make decisions on your behalf if you are unable.
Estate planning can also be used to provide your representative authority to access your social media and online storage accounts such as Facebook, LinkedIn, Instagram, Shutterfly, Dropbox, etc. Without providing this authority, it can be very difficult and time consuming for your loved ones to gain access to your social media accounts on your behalf. (Bear in mind that it is also important to keep a list of your confidential passwords or digital access codes.)
These are just a few of the reasons to avoid procrastination when it comes to estate planning.
I was originally going to write this essay next month but I decided the topic is so important I should not wait. Likewise, I recommend that you not delay in the thoughtful planning of your estate.