By: Jose Roman
On today's post I will discuss some common reasons why people delay or forgo estate planning and why you should reconsider these reasons and start your estate plan today.
Everyone needs an estate plan
When I decided to start my own law firm I chose estate planning because it is an area of the law that everyone can benefit from. Unlike other areas of the law like business law, criminal law or bankruptcy law everyone needs an estate plan. Not all of you who read this blog will start a business, be prosecuted for a crime or need to file for bankruptcy. However, life has a beginning and an end. More importantly what happens in between the beginning and the end are the moments we cherish, the family we have and love, the hard work and effort we put into making our lives better for ourselves and our family, and the idea that our efforts can leave future generations in a better place then we are in today. With these thoughts in mind we should not look at estate planning as something that is nice to have, or something that we should get around to eventually, or that it is limited to only what happens to your "stuff" after you pass away, but as a means of protecting our family and our hard work that we have put in between the beginning and the end.
This recent article from CNBC mentions that only 33% of Americans have an estate plan when they pass away and some of the commons reasons why people choose not to get one. On today's post I will discuss these reasons and hopefully get you to seriously think about estate planning today.
Reason # 1 - I'm just not wealthy enough
One of the most common reasons mentioned by people and also mentioned in the CNBC article of why people forgo estate planning is they perceive they are not wealthy enough to need one. In my most recent blog post, I discussed the 6 essential items your estate plan needs in Pennsylvania, some of which did not revolve around your wealth but rather about naming someone who could make decisions for you if you were sick or disabled. It is important to realize that no matter your level of wealth you need to take steps to protect your family and your assets from needless court processes that can significantly reduce or eliminate any wealth that you do have.
I recently had the privilege of providing free legal services to elder community members in Philadelphia who needed help with estate planning through a local legal services clinic. These community members needed free legal services because they are unable to afford them otherwise and by most standards would not be considered wealthy. What they recognized is that wealth is measured not just by how much money they have but also by who they wanted to protect. They realized that what little they did have should be protected for their sons, their daughters and their grandchildren. After spending a day with the clinic the sense of relief these community members had was something that will stick with me forever.
Many of us are more fortunate, we own a house, maybe even two, we have vehicles, bank accounts, retirement accounts through our employers, prized possessions such as a gift that has been handed down from generation to generation, or something that reminds us of our loved ones that are no longer with us. If you fall into one of these categories it is important for you to think about how you want these items handled and who should benefit from them and put it into writing. The only difference between you and someone who is more "wealthy" is the means by which you accomplish your goals, but the process is still the same. We all have an estate plan, its just a matter of whether or not it is YOUR estate plan or the one given to you by the government. Check out this link to learn more about intestate succession in Pennsylvania for the government provided estate plan.
Reason #2 - Just haven't gotten around to it
Another common reason people do not have an estate plan in place is because they state they haven't gotten around to it yet. It makes sense too right? It's one of those things that we know we need to do, but will get around to eventually. The issue that arises is when eventually never comes and at the precise moment when your or your family needs one of your estate planning documents they were never created. I want to emphasize that estate planning is not just about having a will. Your estate plan includes powers of attorney for finances and healthcare decisions that someone can make on your behalf in the event that you cannot do so for yourself. If that need arises and you are not adequately prepared, then the amount of time and expense that would be required for your family to a get a Guardianship for you far exceeds the amount of time and expense you would have invested had you been proactive in your estate planning.
If you die without a will then your estate will be passed onto your heirs by the laws of intestate succession that I mentioned above. This may cause issues because maybe someone who you think is not responsible would be appointed to be in charge of managing your estate, or maybe someone you didn't want to inherit from you would be entitled to a large portion of your estate. If you have children that are minors and you and your spouse both pass away, you may have a situation where it is unclear who should take care of them. If there are significant assets also involved then you may have infighting amongst your family members as they battle over who should take care of your children along with the inheritance they would be entitled to.
I make these points not to try and scare you into focusing on estate planning, but rather to emphasize that there should be a sense of urgency when it comes to planning because we never know what life will throw at us on any given day. A little bit of preparation can go a long way. My father has a saying, "It's better to have it and not need it then to need it and not have it." My father and I disagree about a lot of things, and I'm sure when he says that to me he's not talking about estate planning, but they are words of wisdom nonetheless that I can agree with him on.
Reason #3 - Estate Planning is too costly
Another reason cited in the CNBC article is that estate planning is too costly. Admittedly, whenever you engage professional services such as lawyers to help with your legal issues, the price you are quoted may seem too much to stomach. However, their are some things you can do to make sure that you are getting what you pay for. You should also realize that any cost you incur estate planning well be much less than what you or your family would pay without an estate plan.
One thing that is common is that your situation is unique to you and your family, so without knowing your personal situation I cannot quote you a price on how much your estate plan will cost here and now, and I would be suspicious of anyone that did without first getting to know you, your financial and family situation. Here are some things to consider.
First, many attorneys now are charging flat fees for estate planning. What this means is after you request a consultation you will be asked to complete an estate planning questionnaire which asks questions about your finances, family, who you would like to designate to fill the various roles in your estate plan and who you would like to benefit from your estate plan. For a copy of our questionnaire click here.
After going over the questionnaire with your attorney and they have an idea of what your plan requires they will quote you a one time fee to complete your estate plan. With a flat fee you know what you are paying ahead of time and you know exactly what you are going to get from the attorney. It is also important to note that this fee is negotiable between you and the attorney.
If an attorney quotes you an hourly fee or some other fee arrangement, question them ahead of time on how long they would expect the process to take and roughly what the final cost will be. Remember you are the consumer here, in no other aspect of our lives do we allow the price for something we pay to be a mystery.
Next, due some research. In today's internet age more and more legal consumers are coming to their attorneys more educated than ever before about their legal issues, prior to hiring them. If you have questions about estate planning there are countless books, articles, blog posts and other resources that you can use to learn more about the topic. Taking the time to learn about the topic ahead of time before hiring an attorney allows you to have a more productive consultation with them, but more importantly allows you to learn which questions you should be asking them so you can make an informed decision on whether or not to hire them. It's a more engaging process that allows you to feel confident about who you are hiring, what you are getting out of the representation and whether the cost of the representation is too much (or too little) based on your personal situation.
Finally, if you truly cannot afford legal services there may be a lawyer that can do it for free. The Pennsylvania Rules of Professional Conduct state that lawyers should render public interest legal services, usually at not cost or at a reduced fee. What this means is that attorneys have an obligation to provide legal services to those who cannot afford it. If you cannot afford legal services there are various organizations that can get you in touch with lawyers who will provide these services for free or at a reduced cost.
In Pennsylvania there is the Pennsylvania Bar Association, in Bucks County there is the Bucks County Bar Association, in Philadelphia, there is the Philadelphia Bar Association, all of which have lawyer referral services that can get you in touch with an attorney. If you live in another state or county check with your local bar association to get in contact with an attorney.
Another option is charitable organizations that provide legal services for free. Many of these organizations contact private practice attorneys to provide legal services for their clients. The organization will screen you to see if you qualify for their services and then will setup legal clinics where attorneys and clients meet to resolve their issues. A quick Google search for "Free Legal Services Near Me" will return results for these types of organizations.
Reason #4 - Don't know how to get a will
The final reason stated in the article from CNBC is that people said they didn't know how to get a will. I know I've stated this multiple times but it bears repeating that estate planning is about more than just having a will. That being said there are numerous resources you can use to get a will as well as your other estate planning documents.
My first and strongest recommendation will always be to talk to an attorney that practices estate planning law. If you use the tips I've given you in Reason #3 you should have no trouble finding an attorney that can work with you at a price that is reasonable for your situation and that you are comfortable with. When you hire an attorney you have a team member on your side that is working in your best interests, has knowledge about the law and can advise you on how to structure an effective estate plan.
Now I know what your thinking "But Jose you're an estate planning attorney, of course you would strongly recommend an attorney." You're right, I am an estate planning attorney, but my mission is to first educate the public about the benefit of the services I provide and then if those people would like to hire me to help with their estate plan I would gladly do so. But my first goal is to help people understand that estate planning is not just for the wealthy, is not something that someone should be intimidated by just because an attorney is involved or that is out of reach because they perceive that it will cost too much. If I can get more people to think about this topic and make changes in their lives today I will be happy, if someone just so happens to hire me that is just an added bonus, but not my main concern.
Another option, although not perfect and not one that I would not recommend personally, is searching for services online that can prepare a will for you. Many of these services will ask you some questions about your situation and return to you a completed copy of your will with instructions on how to complete it. Many of these services are pretty cheap, but you know what they say, you get what you pay for. Some of these services will charge you a small fee to prepare your will, but then will charge you per question if you want to speak to an attorney, or will ask you to join a subscription plan. These services also provide you with other estate planning documents and charge per document with the same per question or subscription fees. While I'm sure these estate planning documents will be legally enforceable they are essentially cookie cutter and are not tailored to your personal situation and the cost savings may not be all that significant, especially if you have a lot of questions about the documents or you forget to cancel your subscription. You use these services at your own risk.
Another DIY solution is to check to see if there is a local law library in your area that has estate planning forms in their collection. You can go copy the forms and use them for your own purposes. Since this is another DIY solution you do so at your own risk, but it is available to most people. I would recommend that if you go down this route that you still consult with an attorney to make sure everything is in order with the documents as the forms at the library may be outdated and may not comply with the current law. Consulting with an attorney in this manner can be cheaper than having them prepare your estate plan, while still giving you some assurance that the documents are correct.
Don't be one of the 67%
If you are one of the 67% of Americans that do not already have an estate plan in place I hope this post gets you to think about starting one today. If you haven't started one because of one of the reasons mentioned, I hope my response to those reasons can help alleviate your concerns. Remember having an estate plan is not limited to only the wealthy. If you have been putting off starting your estate plan just realize that any time invested today can go a long way to saving you and your family in the future.
If you have concerns about the cost of estate planning or you just don't know where to go to get started, there are many ways for you to research the topic and find the right attorney that can help you getting your plan in order. Google is your best friend when it comes to finding the right attorney at the right price for you, so shop around. Many of us shop for cars or houses online, especially in recent years, finding an attorney for your estate plan is just as simple and I would argue more important than buying a house or a car.
If you are a DIY type of person there are options out there for you as well. Just remember that using these options comes at a greater risk than hiring an attorney and the costs savings may not be as significant as you may think, not only in terms of money, but in time as well as you may need to do a little bit more research about the law to make sure your documents are good to go. My first recommendation is to just hire an attorney, but if you insist on going the DIY route there are options out there for you.
Don't be one of the 67% and don't leave your estate to chance.
If you have any questions about this post or any other topic related to estate planning feel free to e-mail me at firstname.lastname@example.org and I would be happy to assist you. If you would like to request a consultation you can do so at https://www.romanestatelaw.com/book-online