Estate Planning Is Not Just for the Rich

Posted by Harvey L. CoxSep 08, 20210 Comments

There is a common misconception "out there" that estate planning is just for the rich. Let me clear that up.  Estate planning is NOT just for the rich. It's for everyone. That's right, everyone. It doesn't matter what you do for a living, whether you have a dozen kids or no kids, whether you think you have an estate to plan or not, estate planning is for you.

What Is Estate Planning?

Estate planning is nothing more than a plan that protects your loved ones when you die. Notice, I said, "when" you die, not "if" you die. Death is a certainty for all of us. So, we should all plan for it. If you have a plan for when you die, your loved ones will have adequate protection. If you don't plan for when you die, your loved ones have no protection.

Why We Don't Plan Ahead

I have people tell me they know it's essential to prepare for death. They say they'll make an appointment to talk about their options. The vast majority never follow through. Why is that? If we know a plan is vital for protecting our families, why don't we follow through and make a plan?

Here's what I think

We're in denial.

Whether we admit it or not, we all think we're not going to die. After all, that's something that happens to the other guy. No, that's not right. We're all going to die. And, we all know that death is inevitable.

So then I hear:

"You're right. I am going to die. Of course, I know that. But, the day I'm going to die is not today. I'm going to die 'some day' down the road. Right now, I'm just too busy to deal with it. I'll do it 'some day' before the inevitable happens."

The problem is that you don't know the day it will happen.

My father died unexpectedly at the age of twenty-three years old.  I was only six years old at the time.  My oldest son died unexpectedly in March 2020 at the age of twenty-four.  None of us knows when it will happen.

Postponing a plan most likely means you'll die without a plan. Don't let that happen.

Or, I hear:

"l don't have to worry about what happens when I die. My spouse and I have everything in our names jointly. If one of us dies, the other gets everything."

But, what happens if you die together like in a car accident (I'll give an example a little later in this article)? Do you have a plan for your children?

Or, I hear:

"l don't have an 'estate,' so I don't need a plan."

Really? Tell me, do you own a home? Do you have life insurance? Do you have a car, bank account, or 401(k)? If you have any of these, you have an "estate" subject to the probate process, and you need a plan.

Or, I hear:

"I can't afford to pay for an estate plan."

Hmm, do you have minor children? If so, you can't afford NOT to have an estate plan because you need to appoint a guardian to take care of your children if you and your spouse both die before they're grown. And, what about the expense of creating an estate plan? Have you purchased a new flat-screen television for your home? How about new living room furniture? Well, it costs about the same to prepare an estate plan. It's just a matter of priorities.

I've even heard:

"I'll be dead, so what do I care about what happens to my estate?"

Should I have to address a question like that? Unfortunately, I do hear that from some people. The answer is that you should care a lot if you have loved ones. There's just no excuse for not having a plan.  It doesn't matter how young or old you are or your financial circumstances; you should have a plan.

If you die without a plan, the State of Texas decides who gets your "stuff." The State will also determine who takes care of your minor child. Besides, it's incredibly irresponsible to leave your family a mess to unravel after your death. So, make a plan.

Using Online Services for an Estate Plan

I do NOT recommend using an online form to create ANY legal document.  Doing it yourself works well for a lot of things, but this is not one of them.  An estate plan is one of the most important things you'll ever create. It is not something for which you want to trust an online form or service.

If you've ever visited one of these online legal sites, you'll notice they have lots of disclaimers making sure you understand that they're not giving legal advice. They have those disclaimers because they can't provide legal advice. All they can do is give you a form with a cookie-cutter language and leave you to your own devices to try and figure out how to fit your situation into that mold.

How do you know if you're doing it right? How do you know your family will get what you intend for them to get? Without proper legal training, you don't know. And, if you use the wrong words and phrases in an estate plan, you may very well end up doing the exact opposite of what you mean to do.

The horror stories involving poor drafting of wills are legendary. You do not want your estate to join the scores of such stories, so don't try to do it yourself. Here's a story illustrating my point. The names are fictional, but this happened.

Unintentional Disinheritance

Jim and Laura had two grown children and five grandchildren. They wanted to make sure they had a Will to protect the inheritance for their children and grandchildren. So, using a popular online service, they prepared a Will. They followed the prompts, answered the questions, checked the boxes, printed and signed the documents. They thought they had adequately protected their children and grandchildren.

A few years later, Jim and Laura, and their son were killed in a car wreck. Afterward, the family discovered that three of the grandchildren were disinherited. What happened?

Well, when Jim and Laura completed that online form, it included a sentence that read, "our estate should go in equal shares to our two children." Of course, that sounded right to them, so they never questioned it beyond the "check box" presented by the online service. But, what Jim and Laura didn't realize is that they made no provision for what would happen to the share of any child who died before them or at the same time as they died. As a result, they had no statement in the Will to give the children of a deceased child the share the deceased child would have received.

When Jim and Laura died in that car crash with their son, his three children were not included in the inheritance through the Will. They were unintentionally disinherited. This unintentional disinheriting would not have happened if Jim and Laura had consulted with a qualified attorney to create an estate plan rather than depending on a generic, fill in the form, online service.

This tragic scenario is played out over and over again in real-life situations. Estate planning is not a do-it-yourself project. Go to a qualified professional who can help you make the right decisions to carry out your plans to protect your loved ones.

Always Consult a Qualified Professional

Planning your estate and protecting your family is the most important thing you can do before you die. Please don't leave the decision to later because it may be too late. And, don't depend on a form from the internet or a legal service on the internet. The decisions you need to make are too important to trust anyone other than a qualified professional.

Estate planning is what I do. I am more than happy to sit down with you, answer your questions, and help you prepare a plan that protects your family. There is no better way to have peace of mind about your family's future after you're gone than to know you've prepared a plan that ensures they are adequately protected.

Resources for More Information   

For more information to help you prepare an estate plan, download my books. If you prefer physical copies of the books, call my office at (254) 233-7300, and my staff will get copies to you in the mail.   

I present an estate planning webinar several days a week, you can register for it here.