If It Isn’t Raised It Should Be!

There is a common misconception that estate planning is only for the rich.  So let’s do a test to determine whether you need an estate plan.

Imagine you have everything you care about in your left hand – your family, friends, maybe a charity or even if it is only your dog – and in your right hand, you have everything you own, all of your stuff.  Now imagine someone has a gun to the head of someone in your left hand and tells you, “Give me all of your stuff or I pull the trigger.”  What do you do?  You give him all of your stuff.  Congratulations, you need an estate plan.  The reason is that you just said that you care more about the people that matter, then about your stuff.

Now, let’s consider what matters to you:

  • Do you want to make sure you give your stuff to whom you want, when you want and the way you want?
  • Are you concerned about your assets going to a second spouse’s family after you have passed away?  We have all heard stories of one spouse passing away, getting remarried then passing away without an estate plan.  All of your assets are now passed to the second spouse. Who do you think is going to benefit from her estate plan?
  • Do you have a child or relative with special needs?  The loss of governmental benefits can devastate an estate.  Have you designated someone (and their successors) to ensure that the child always has someone assisting him or her throughout their lifetime?
  • Do you want to safeguard your stuff for your spouse in case you must join the millions of residents in nursing homes costing $75,000 per year?  Unfortunately, nearly half of people over the age of 65 will need nursing home care during their lifetime.  Proper planning is essential to not only preserve assets but also to create the most choices for your care.
  • Do you want to protect your stuff from your children’s creditors or divorce after your passing? Make sure your stuff is inherited by the people you want, not by their ex-spouses, creditors or the IRS.
  • Do you want to avoid the “lottery winner syndrome,” which occurs when your beneficiaries spend all the stuff that you spent your whole life building within 18 months?  Giving a child more money is not going to make them happier; it seems that often it makes them less productive and less happy.  Encourage and reward your children for making smart life decisions and not depleting all of your stuff.
  • Do you want to designate someone to manage your affairs if you become disabled?  Without a Power of Attorney, Health Care Surrogate or sometimes a revocable trust, if you become disabled and unable to make decisions for yourself, someone will be forced to open an expensive and lengthy guardianship proceeding so decisions may be made for your benefit.
  • Do you want to designate someone to care for your minor children if something happens to you?  In Florida, if a minor child receives money from an inheritance (this includes designated beneficiaries) exceeding $15,000, then a guardianship must be created for the benefit of the child until they reach 18.  Moreover, do you want to designate who is raising your child?  Do you want to designate someone who has similar values, religious views, educational goals, etc. as you do?  Or do you want to leave it to chance?
  • Are there specific charities that are near and dear to your heart?  If you do not create an estate plan to assist such beneficiaries, then those charities will not benefit from your estate.

If your answer is yes to any of these questions, then raise your hand, you need an estate plan.