On January 26th, some horrific news came out of Calabasas, California. A Sikorsky S-76B helicopter that was carrying basketball great Kobe Bryant and his daughter Gianna crashed. Seven others were aboard, including two other young teenagers, and all occupants perished.
There has been a tremendous outpouring of grief, and there is really nothing more that needs to be said about such a tragic loss of life. At the same time, from an estate planning perspective, there is a profound lesson to be learned.
Estate Planning Unpreparedness
We do not know how the people that were involved in the crash planned their estates, and this is not the purpose of our treatment of the event. However, it is worthwhile to underscore the importance of estate planning for people of all ages.
Caring.com has been conducting surveys to gauge the estate planning preparedness of American adults since 2015. They have consistently demonstrated the fact that the vast majority of people are going through life without wills or any other estate planning documents.
Unfortunately, the most recent study that was conducted this year yielded the worst results yet. In 2017, 42 percent of people that participated stated that they did have wills, but the number decreased to 32 percent this year.
Just 16.4 percent of respondents between the ages of 18 and 34 had wills, and the figure was a very surprising 27.2 percent for Americans in the 24-54 age group. Perhaps most surprisingly, only 47.9 percent of respondents that were 55 years of age and older had estate plans in place.
This is a rather unsettling picture. As we can see from this highly publicized tragedy, people of all ages pass away every day. When you make no plans for this inevitable event, you are putting your loved ones at risk.
Core Estate Plan Components
One of the reasons why people do not take action is because they have no idea what the future will hold with regard to their family situation and their financial capabilities. This is fully understandable on the one hand, but on the other, estate planning should be viewed as an ongoing process.
Your initial estate plan will reflect your life situation at that time, and there are certain components that should be included in any basic but well-constructed plan. First, if you are the parent of a dependent child, you should nominate a guardian in your will.
Life insurance is a key component, and it is particularly important for younger adults that have dependent children. Term life insurance has no cash value, but it is relatively inexpensive, and it can serve as the ideal income replacement vehicle.
Asset transfers can be facilitated through the creation of a Last Will or a Living Trust, and there are other types of trusts that can be suitable depending on the circumstances.
An incapacity planning component should be included as well to designate agents to make financial and medical decisions on your behalf. This aspect of the plan should include a Living Will that is used to state your preferences regarding the utilization of life support measures.
Take Action Today!
About 60 percent of the people that participated in the survey said that they felt as though estate planning was important. Yet, many of the same individuals were completely unprepared.
If you are in this position yourself, action is required sooner rather than later. We would be glad to gain an understanding of your situation and explain your options so that you can make fully informed decisions.
To set the wheels in motion, give us a call at 513-721-1513. We also have a contact form on this website that you can use to send us a message.