However, like economics, budgeting, history, and taxes, estate planning is something you ignore at your own peril. (And the peril of future generations!)
What is Estate Planning?
This planning deals with questions like this: “If you died tomorrow, who would take care of the kids?”
If you have someone in mind, then two questions must be asked in response:
“Do they know you expect this from them?”
“Is it in writing?”
Most people I have worked with do not have even this level of planning done. If the plan is in writing, is the document notarized? Would a judge accept it in a probate proceeding?
Now that we have taken care of custody, what about your land? Will your heirs be subject to estate taxes? Is a trust needed? What if you are alive, but severely disabled?
What about any inheritance you may receive? That can (and often does) derail your own planning. Will you be inheriting assets? Debts? Do these have tax-qualified (read: strings attached) considerations?
Note that I do not believe this process should be so complex. I am mere stressing that it often is.
Waiting Can Have Serious Consequences!
And what do we all love to do with complicated issues that we know little about?
You guessed it! Ignore them.
But when dragons are ignored, they grow. Or, they may emerge from their lairs to wreak havoc. In other words, these conversations are more difficult the longer you wait to have them. Wait too long, and your survivors will be sitting in probate court, never having heard your wishes and at the mercy of a judge who knows nothing about your family.
If you have built your own banking system as I strongly encourage everyone to do, this becomes even more important. The power of this strategy is unlimited, but it requires understanding.
Now, I want to be clear: My position is not that you should sit down with your close family and try to work out what “your share” is. No! No. Please, do not do this. Things like this are private matters, and I can’t possible give “one-size-fits-all” recommendations for how to navigate these complex interpersonal affairs.
Start Now, Improve Along the Way
Start where you can start. What do you, personally, want to see happen in the event of your untimely death? Talk about this with your spouse. Do you know how they feel about it? What is important to you may not be so important to them.
What is your spouse’s plan? How do you feel about it?
Once you can settle some of these things, you may be ready to expand this: How do your parents and spouse’s parents feel about these plans?
Do you have adult children? How do they feel about these plans?
And again, with creating your own banking system: Do your heirs know what is really going on? Don’t you think it would be worthwhile to talk to them about these things now, and to leave clear instructions for when you aren’t?
Make progress today, and review your plans every few years, or when something major changes in your life. But remember, the most important thing is starting!
There will always be something more urgent to take care of. I implore you: Make this urgent. I am here to help you lay the groundwork!*
(* Disclaimer: Please note that I am not an attorney, and cannot create wills, trusts, guardianship documents, etc. I cannot give you legal advice. I can help you with the life insurance part of this, and help you consider the right issues before contacting an attorney.)