By Barry Zimmer on August 18th, 2020 in Estate Planning
There are some statistics that really make you shake your head in disbelief, and this phenomenon certainly applies to estate planning preparedness. The popular website Caring.com conducts research on an annual basis to evaluate the subject, and they have uncovered some very surprising facts.
In 2020, just 27.2 percent of individuals that were between the ages of 35 and 54 had estate plans in place. This represents a significant downward trend, because the previous year, the figure was 37 percent.
Those are some attention-getting numbers, but most people act by the time they are senior citizens, right? You might assume this is true, but the facts tell a different tale. Last year, just 47.9 percent of respondents that were 55 years of age and older had executed wills or trusts.
Clearly, there is a widespread lack of preparedness out there, and inaction can yield negative consequences. Let’s take a look at the potential fallout from an overview.
Intestate Succession
If you do nothing from an estate planning perspective, and you pass away before you take action, the result would be the condition of intestacy.
When these circumstances exist, the probate court would appoint a personal representative to act as the administrator. This is essentially the same role as an executor would play if there was a will in place.
During probate, final debts must be paid, so the personal representative would take care of this part of the equation. Assets would be inventoried and prepared for eventual distribution to the people that would be in line to receive inheritances under the intestate succession laws of the state of Ohio.
Most people would not be happy with the outcome if their estates were distributed in this manner. For example, if you are single and you die without any children, your parents would inherit everything.
There are many people that don’t get along with one or both of their parents, and short of this, your parents may be perfectly okay financially. Another scenario exists if you are married, and you have a child or multiple children with someone other than your spouse.
If you die intestate when you are in this situation, your surviving spouse would inherit the first $20,000 of your separate property, and the rest would be split equally between your spouse and your children.
Under another scenario, if you die with a spouse and children that were born to your spouse, your surviving spouse would inherit everything. If he or she was to remarry, where does that leave your children?
It is possible that the way the assets are distributed would be in line with your true wishes, but in many if not most cases, this is simply not the case. Why roll the dice with intestacy when qualified estate planning assistance is just a phone call away?
The Impact of Incapacity
Your life expectancy will be 85 years if you are a man, and 87 years if you are a woman, on the day that you celebrate your 67th birthday. Over 30 percent of people that are 85 years of age and older have contracted Alzheimer’s disease. The number is about 10 percent for all senior citizens.
These are some compelling numbers, and Alzheimer’s is not the only cause of incapacity. Estate planning documents that are created when the individual in question is not capable of making sound decisions are not valid.
Plus, if you do not plan for potential incapacity in advance, the state could step in to appoint a guardian to act on your behalf. You can prevent this if you execute durable powers of attorney. These legal devices are used to name agents to make health care and financial decisions for you if it becomes necessary.
Schedule a Remote Consultation Right Now!
Action is required if you are going through life without an estate plan. Out of an abundance of caution, we are offering consultations through Zoom meetings, so you can get the help that you need without taking any risks.
If you would like to set up an appointment, call us at 513-721-1513 or send us a message through the contact page on this website.