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In 2008, the National Association of Estate Planners and Councils (NAEPC) worked with Congress to pass a resolution proclaiming the third week in October as National Estate Planning Awareness Week.
The resolution noted that “Many Americans are unaware that lack of estate planning and financial illiteracy may cause their assets to be disposed of to unintended parties by default through the complex process of probate.”
What is estate planning? Estate planning is simply planning ahead to control your property while you are alive and able, take care of yourself and your loved ones if you become disabled, and give what you have to whom you want, the way you want and when you want, while saving every tax dollar, professional fee and court cost possible.
Who should plan? Everyone, single or married, who has accumulated any assets and wishes to determine how those assets will be managed in the event of incapacity, or distributed at the time of death.
Many people mistakenly believe that since they aren’t “rich,” they do not need to do any financial and estate planning. Estate planning is not just for the wealthy and is important for everyone. This attitude can be financially harmful in the long run and, more importantly, cause stress and chaos for your loved ones. Proper estate planning is one of the best gifts you can give your loved ones.
Although saving taxes and probate costs is always a goal in any estate plan, it should not be the primary concern. Estate planning is especially important if you have minor or special-needs children or grandchildren, or if you wish to control how your assets will be managed or transferred. Therefore, no estate is too small for planning.
If you do not have an estate plan, you are not alone. Most Americans do not even have a simple will. It is estimated that more than 120 million Americans do not have an up-to-date estate plan to protect themselves and their families, making estate planning one of the most overlooked areas of personal financial management. With advance planning, issues such as guardianship of children, managing bill paying and assets in the event of sickness or disability, care of a special-needs child, long-term care needs and distribution of retirement assets can all be handled with sensitivity and care at a reasonable cost.
When should I plan? Now. Estate planning is done to prepare for the event of an injury or illness resulting in incapacity or death. None of us likes to think about our own mortality or even the possibility of becoming incapacitated. That is why so many families are caught off guard and unprepared when incapacity or death strikes.
You can only plan your estate before these events occur. Afterward, it is too late. Estate planning is one of the most thoughtful and considerate gifts you can give to your family.
During National Estate Planning Awareness Week, take a few moments and think about the legacy you want to leave. Remember,as John F. Kennedy once said, “There are risks and costs to action. But they are far less than the long-range risks of comfortable inaction.”
Tom Holland is a local attorney and owner of the Law Offices of Thomas W. Holland Sr. LLC.