When John received a phone call telling him that his brother had been in a life-threatening motorcycle accident and was unconscious at a hospital, John and his wife, Patty, rushed to his side. But they quickly learned that family members had no say in his medical treatment as he had no advance health care directive or living will outlining his wishes or giving a power of attorney to anyone.
This experience was an eye-opener for John and Patty. They now made sure that their two daughters, who were in their early 30's had these documents in place.
September 11th hit home for a lot of people. It didn't discriminate against 18-year-olds or 90-year-olds. Deaths of entertainment figures like George Michael and Prince hit home with a generation that grew up with their music.
Still, 64% of the general 18-and-over population did not have any sort of estate planning documents in 2016, according to Rocket Lawyer.
It often takes a life event like the birth of a child, a divorce or a death in the family to motivate people to create an estate plan.
Estate Planning Can Avert Family Warfare, If Done Right
Many people don't realize that if no estate plan is in place, or if the terms are not explicitly laid out and regularly updated, there can be chaos after an accident or death, even among the friendliest of siblings.
When you're both gone, you need to understand your children will fight, and if they don't, you're a 1-percenter - meaning a rare case.
When someone dies without an estate plan, the probate court judge chooses guardians for minor children and who inherits the assets. It could be some distant relative who you've never even met instead of your best friend.
Some people try to avoid estate planning by gifting their assets to their children. That's a mistake. Consider Jane, who had sold her home and transferred all her assets to her children with the understanding that they would provide her a monthly allowance to cover her expenses. But Jane lived longer than expected, and when her monthly stipend came up short, her children scolded her for spending too much and were reluctant to give her extra cash.
Never put a house in a child's name (or as a co-owner) while you're still alive. If the child goes bankrupt, creditors can seize the house.
Keep your estate plan updated and always check beneficiary designations on retirement accounts and life insurance policies.
Arrangement for digital assets, including passwords to banking sites, social media accounts and content libraries like iTunes, have become more common, as have provisions for Pet Trusts.
We offer free estate planning consultations every 3 years for our clients and more often if there is a major life event. Our Portfolio Binders provide invaluable information for a successor trustee or executor such as the information mentioned in the prior paragraph as well the location of important records (e.g. life insurance policies) and much more.