5 Huge Consequences for You and Your Family by Not Having an Estate Plan
There are a lot of excuses that people have for putting off estate planning. Some think they are too young and have plenty of time to worry about estate planning later. Others think they just aren’t wealthy enough to need estate planning, and many believe their family will know what to do with their assets when they are gone.
The truth is, estate planning is important no matter your age or your wealth. Bad accidents or serious illnesses can happen to anyone at any age and leaving it up to your family when you are gone just doesn’t always work out like you think it will.
In other words, there are serious consequences of not having an estate plan and living will.
1 | Stress and Complications
Your family is already grieving and asking them to figure out how to bequeath your assets is stressful and can add to their grief. By having an estate plan in place, you are taking the stress of having to figure it out from the equation. Many families find comfort in knowing that they are honoring your final wishes by following your estate plan.
If you don’t have an estate plan, your family may have to go to probate court, which could cause time delays and creates uncertainty and angst during the waiting period. Probate court can also be expensive. Leaving the decision up to a judge could even cause conflict between family members who are already grieving.
All of this can be avoided by having an estate plan in place.
2 | You Won’t Get a Choice Who Inherits Your Assets
If you pass away with no plan in place, the court decides who inherits your assets, and they may decide differently from how you would have. Having an estate plan in place is especially important if you want someone outside of your blood relatives to inherit some or all of your assets, as a probate court often does not consider non-blood relatives for inheritance. As family dynamics have changed over the years, older statutes have not always kept up, and if not defined in a will, those you intended may not receive your assets.
However, with an estate plan in place, you have full control over who inherits your assets.
3 | Your Heirs Will Have a Bigger Tax Burden
Estate planning isn’t just about ensuring the right people inherit your assets. It’s also about protecting your loved ones. This means protecting them from the large tax burden they would have with no estate plan in place. Those who plan can be as strategic as possible to minimize the tax implications upon their passing.
Having an estate plan in place to transfer your assets means creating the smallest possible tax burden for your loved ones. Be sure to speak with a financial advisor who will be able to help you set up your estate plan in a way that creates the smallest possible tax burden for your loved ones. OneDigitalTrust platform can approximate probate costs, federal estate tax and even state estate tax, and inheritance tax in the few states that currently levy them.
4 | You Won’t Get to Choose Who Raises Your Children
As the parent of minor children, it’s imperative that you appoint a legal guardian to gain custody of your children should something happen to you. This could be the most crucial reason to create your estate plan as the absence of a plan could be detrimental to your children.
When there is no legal guardian named, a judge will appoint one. However, this judge does not know your family as intimately as you do, and this could have severe consequences for your family, but most importantly, your children. This could lead to messy custody battles in court. Messy court battles after the loss of a parent can further damage your child’s mental health during an already traumatic season of life.
However, having an estate plan in place that names a legal guardian can help your children and family avoid the trauma of a court battle. This can be helpful for situations with your fur babies as well!
5 | Takes More Time and there’s a Higher Cost for Attorneys
Emotional damage isn’t the only consequence of not having a plan in place. When your family must go through an extensive probate process because you have no plan, it takes more time to resolve issues. Because it takes more time, the cost for attorneys will be higher for your family.
By having a plan in place, you are saving your family from a financial headache. A plan can also mean that your wishes are honored in a more timely manner, allowing your family to work through their grief, rather than hold onto it because of a court claim.
6 | If Incapacitated, You Lose Control Over Your Life Decisions
Bad accidents can happen to anyone at any time. While we may not die from a bad accident, it is possible that we become incapacitated and can not make decisions about our care in those moments. So not only is planning for your eventual death important, but so is planning for the possibility of becoming incapacitated.
Not having a living will in place leaves the decision to your loved ones, meaning you have no say in your financial and medical decisions. These decisions can include whether you should remain on life support or not. Leaving hard decisions such as this up to your family can cause strife between family members with differing opinions, leading to expensive and traumatic court battles.
When you have a living will, you specifically lay out what you want and your family will be able to honor your wishes. This helps to avoid arguments over what they think you would want and expensive court battles.
Are You Ready to Work on Your Estate Plan?
Estate planning doesn’t have to be done in traditional attorneys’ offices. OneDigitalTrust has reinvented personal legacy and estate planning for the digital age. We empower users to always be prepared for events across life stages by making it easy to create and maintain your estate plan.
We work directly with financial institutions by augmenting their existing digital footprint and capabilities. We even offer a personalized platform to deliver this easy-to-use service to your customers. Learn more about how we can help you deliver estate planning to your customers.