In a 2007 poll conducted for Lawyers.com, Harris Interactive found that 55 percent of the adults surveyed didn't have a will. Reasons given included:
Not wanting to think about dying.
Not knowing where to start or who to talk to about setting up an estate plan.
Not believing they had enough assets to need one.
Estate planning isn't only for the wealthy. Anyone who has something of value that they want to pass on to family members or loved ones at their death needs a plan to make it happen in accordance with their wishes. Estate planning isn't the most pleasant of topics to contemplate, but people without a will are leaving it up to the state to decide what happens to their assets, and maybe even their children, if they should pass away.
You should consider consulting an attorney, CPA or financial planner. Depending on the size and complexity of your estate and the number of heirs, you may need all of them. Following are tips to get you started.
An estate plan can be as simple as drafting a will or as complex as setting up a trust and a living will. At the very least, anyone who has assets they would like to pass on to specific individuals should create a will. A will can also establish guardianship of children. Most wills have to go through probate after the individual's death. In probate, a court oversees the payment of any debts and distributes inheritances -- the process can last several months.
While a trust might sound like something only wealthy people need, it's actually a tool for anyone who would like to set conditions on how and when their assets are distributed. For example, you might want to create a trust dictating that a child will receive his inheritance over time, rather than in a lump sum, and that restricts how the money can be spent.
A living will provides a way for an individual to communicate her desire, or not, for life-saving measures in case she's incapacitated. In addition to a living will, individuals can also assign health care power of attorney to someone they trust who can further ensure that their wishes are fulfilled.
There are many resources available for estate planning and creating the necessary documents. For simple estates, there are websites that offer inexpensive do-it-yourself tools for creating a will. For more involved estates, it's best to enlist the help of one or more professionals licensed and experienced in estate planning, establishing trusts, and related matters. Check them out with the Better Business Bureau or ask us for a roster of BBB Accredited Businesses that can help you.
Discuss the terms of the plan with all family members and loved ones affected by it. An estate plan needs to be revisited and perhaps revised any time you or someone mentioned in the plan undergoes a significant life change, such as a death or change in marital status. It should also be re-evaluated in case of major financial changes, such as new investments or the sale or purchase of a business.
Randy Hutchinson is the President and CEO of the Better Business Bureau of the Mid-South and can be reached at firstname.lastname@example.org.
Reprinted with permission from The Commercial Appeal.