The popular website Caring.com conducted a study in 2017 to gauge the estate planning preparedness of American adults. As estate planning attorneys, we are well aware of the fact that a lot of people are going through life without the proper estate planning documents. This being stated, the actual statistics that the survey uncovered are truly eye-opening.
In all, only 42 percent of adults in the United States had a will or trust in place to facilitate postmortem asset transfers. One shocking statistic was the fact that just 36 percent of parents with children under the age of 18 have made any preparations for the benefit of their families.
As you might expect, most people that obtain senior citizen status do have a will or trust, but the percentage of older individuals that do not is also quite surprising. Nearly 20 percent of people that are 72 years of age and older have no estate planning documents in place. More than six out of every 10 people that are between the ages of 37 and 52 are rolling the dice without wills or trusts.
Action Is Required
Getting back to the statistic about parents with dependent youngsters, it can be argued that estate planning is more important for them than it is for elders. After all, the children of senior citizens are going to be grown, independent adults in their own right.
Things are entirely different when you have young children depending on you for everything. You never know what the future holds, so you are carelessly putting your family at risk if you do not have an estate plan in place as a younger parent.
Make Informed Decisions
Sometimes people get the message, and they want to put an estate plan in place, but they don’t want to put much time or effort into it. They download some type of do-it-yourself last will template and fill in the blanks.
This is extremely risky business, because these documents were examined by legal professors that were enlisted by Consumer Reports a number of years ago. After hearing what the esteemed scholars had to say, the magazine and website recommended against DIY estate planning.
There are many different ways to approach the estate planning process, and the right course of action will depend upon the circumstances. The typical layperson is simply not going to know why you should use one document instead of another.
For example, there are those that are not aware of the fact that a last will must be admitted to probate. This is a legal process that takes place under the supervision of a court. If you are like most people, you would probably like your loved ones to receive their inheritances in a timely manner after you are gone.
Unfortunately, when probate enters the picture, this will not happen. It will typically take somewhere in the vicinity of nine months to a year for probate to run its course, and no inheritances can be distributed while the estate is being probated.
This is one drawback of probate, but there are others. A good way to facilitate asset transfers outside of probate is through the creation of a revocable living trust.
You would not lose control of the assets while you are living if you establish this type of trust, because you can act as the trustee and the beneficiary. Since the trust is revocable, you could actually dissolve it at any time, so your control would be absolute.
In the trust declaration, you name a successor trustee to administer the trust after your passing, and your heirs would be successor beneficiaries. When the time comes, the trustee would follow your instructions and distribute the assets in the trust to your beneficiaries in accordance with your wishes. Probate would not a factor.
This is one vehicle of asset transfer that can be a good alternative to a last will, but there are other types of trusts that can satisfy more advanced aims.
It is also important to prepare for possible incapacity when you are planning your estate. This is done through the execution of a living will along with durable powers of attorney to name representatives to handle your affairs in the event of your incapacitation.
Attend a Free Seminar!
We are holding a series of seminars over the coming weeks, and you can learn a great deal to attend the session that fits into your schedule. To get all the facts, visit our seminar page and follow the simple instructions to register for the date that is right for you.
- What You Need to Know about Planning for Elder Care - March 21, 2023
- Can a Trust Be Contested? - March 16, 2023
- Ohio Medicaid Limits for 2023 - March 14, 2023