Do Your Friends and Family Have Proper Estate Planning in Place?

I was talking with my parents this weekend about estate planning.  We got around to the fact that many people are putting off estate planning due to misperceptions about an uncertain economy and the effect that has on the need for estate planning.

My parents have had their planning complete for some time now and I was curious about whether their friends have been as diligent.  As it turns out, they'd actually discussed the matter with a close group of friends.  The group is all 55+ with a high average level of education.  Many had, prior to retirement, been government employees at some point during their careers.  The level of personal assets/income in the group varies widely.

As you've read other places in this blog, elsewhere around the Internet, and in many/varied periodicals - a majority of Americans do not have a meaningful estate plan in place.  So, what do you think?  What were the results of my parents' informal poll of friends?  50% or less having this critical part of their lives properly taken care of?  That's what I thought.

I was pleasantly surprised to learn that every member of the group has some sort of planning in place.  Outstanding!

Now, the next important questions are:  1.)  When was that planning last reviewed? and 2.)  Does the planning still reflect their family situation and wishes?  My guess is that a significant portion of this group hasn't had a review of their plan since before the year 2000 (that is to say, no review since before EGTRRA took effect).  Almost certainly, they've not reviewed their plan in light of this year's estate tax repeal, the attendant tax basis/capital gains tax changes, and what now looks like a fair likelihood of a shrinking estate tax exclusion starting next year.

To those of you have a plan in place - bravo!  You have put yourselves head and shoulders above most of your contemporaries.  The responsibility to yourself and your family does not, however, end there.  If your estate planning attorney has not been in touch with you regarding review of your plan - contact him or her.  If you do not have a relationship with an estate planning attorney you trust, and would still like a review, contact us today.

Not Another Reason to Put Off Taking Care of Your Family

A recent survey conducted by Harris Interactive for Lawyers.com http://bit.ly/d9cOiH reveals that interest in Estate Planning has declined among Americans.  The article posits that one of the reasons for the decline, apparently only 35% of Americans now report having a will and only 21% report having a trust, is the ailing economy.

I have no problem with the facts outlined in the survey (except that there is no information about the size of the sample or other relevant factors to determine the validity of the survey), but it is unconscionable that the author did not chastise Americans for being so short sighted.  After all, shortsightedness is what got us in this economic mess in the first place (mortgage backed securities anyone?).  The author should have taken the opportunity to point out the importance of estate planning even during and maybe especially during an economic downturn.

Your responsibility to your children if you are a parent of young children or to your family in general if you are not does not end because of an economic downturn.  If you are a parent of young children, you have an obligation to make sure that your children will be cared for if something unfortunate happens to you.  This means making sure that you have adequate life insurance in place and making sure that you have an estate plan, even if you don't need anything complicated.  If you do not have a will, the decision of who will take care of your children will be left to the probate court and your family or perhaps a stranger.  You must have at least a simple will if you have kids.

Furthermore, you may or may not know this, but it is far more likely that you will be become disabled at any point during your life than that you will die.  With the proper plans in place, things will be much easier for your family to handle if you should become disabled.  You owe it to your family to get a plan in place right now.

Last, if you don't make your wishes with respect to life support known through the proper legal documents (Advance Directive or Living Will), then your family could end up with the same type of struggle that Terri Schiavo's family suffered through.  You owe it to your family to make sure that your wishes are spelled out in the proper legal document.

So, in sum, the economic downturn should not deter you from putting a plan in place.  While the plan you need might not be as complex as what you will need when things bounce back, having a plan is your obligation to those that you will leave behind.