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Why people avoid estate planning and why they shouldn't

by Legacy Plan
March 14, 2024

Although estate planning is as a pivotal element of financial and legacy management, it is frequently overlooked or postponed. At its core, estate planning is the process of organizing how an individual's assets will be managed, preserved and distributed during incapacity and after death. It encompasses a range of considerations from wills and trusts to taxes and health care directives. Despite its critical role in ensuring one's wishes are respected and loved ones are cared for, many people hesitate to engage in this vital planning.

This widespread reluctance stems from various underlying causes. Misconceptions about estate planning often lead people to believe it is only necessary for the wealthy or the elderly, overlooking its relevance to people at all stages of life and wealth levels. For others, the mere thought of estate planning is intrinsically linked to the discomfort of acknowledging mortality. This discomfort can be so profound that it overshadows the practical and necessary aspects of planning for the future.

Beyond emotional barriers, the perceived complexity of estate planning also plays a significant role in its avoidance. The legal intricacies, financial details and the sheer array of documents and decisions can appear daunting, making the process seem insurmountable. This complexity is often compounded by the fear of making irreversible or wrong decisions, leading to potential family disputes or misaligned asset distribution.

Procrastination further exacerbates this issue. Estate planning is often viewed as a task for the distant future, leading many to deprioritize it amid more immediate concerns. Coupled with a general lack of awareness and education about the estate planning process and its benefits, it's not surprising that many delay or avoid it altogether.

Why wealth isn’t a requirement for estate planning

One of the most persistent myths about estate planning is that it is exclusively for the affluent. This misconception stems from the notion that estate planning is solely about managing large estates or complex financial portfolios. However, the truth is quite the contrary. Estate planning is a critical step for individuals at all wealth levels, as it encompasses much more than just the distribution of significant assets.

Estate planning is fundamentally about control and clarity. It allows individuals to dictate how their assets, regardless of their size, should be distributed upon their passing. This includes not only financial assets like bank accounts and stocks but also personal possessions, real estate and even digital assets. By having a clear plan in place, individuals can ensure that their assets are distributed according to their wishes, thereby avoiding potential disputes and misunderstandings among family members.

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For those with more modest estates, the absence of an estate plan can lead to significant legal complications and discord among loved ones. Without clear directives, state intestacy laws often determine how assets are distributed, which may not align with the deceased's intentions. This situation can be particularly challenging for unmarried partners, stepchildren or other non-traditional family structures, as standard laws may not reflect their unique family dynamics.

Furthermore, estate planning encompasses more than just asset distribution. It includes making critical decisions about guardianship for minor children, health care directives, and power of attorney arrangements. These aspects are essential for all individuals, regardless of their wealth status. For instance, a health care directive outlines a person’s wishes regarding medical treatment if they become unable to make decisions themselves. Similarly, a power of attorney grants someone the authority to make financial or health care decisions on one's behalf in case of incapacity.

Discomfort with discussing mortality is excuse to procrastinate

The reluctance to engage in estate planning often stems from a deep-seated discomfort with discussing mortality. For many, the thought of death is daunting and evokes a range of emotional responses, from fear to denial. Estate planning, by its very nature, necessitates a confrontation with the inevitability of death, making it a subject that many choose to avoid or defer.

This discomfort is rooted in both cultural and psychological factors. In many societies, death is a taboo subject, rarely discussed openly. This societal norm fosters an environment where individuals feel unease or anxiety at the thought of discussing their own demise. Psychologically, thinking about death can trigger existential fears and force individuals to face their vulnerabilities and the finite nature of life. These emotional hurdles create a significant barrier to initiating estate planning.

an hour glass

However, avoiding discussions around death and estate planning can lead to problematic outcomes. Without clear directives in place, heirs may find themselves entangled in legal battles, grappling with ambiguities in asset distribution. The absence of an estate plan can exacerbate the grief and stress that families already face in the wake of a loved one’s death. Disputes over the distribution of assets can lead to long-lasting rifts within families, damaging relationships and causing emotional turmoil.

Moreover, the lack of an estate plan can result in assets being distributed in ways that do not align with the deceased’s wishes. Again, state intestacy laws dictate how assets are handled in the absence of a will or estate plan, which may not reflect the unique dynamics and needs of a family. For instance, in the absence of a will, a partner in an unmarried relationship may have no legal claim to the estate, despite having shared a life together.

Confronting mortality and discussing estate planning can also provide an opportunity for meaningful conversations within families. It allows individuals to express their wishes and values, ensuring that their legacy is carried on as intended. It can also be a time for families to come together, understand each other’s perspectives, and strengthen their bonds through open and honest communication.

Why does estate planning seem overwhelming?

For many, the very thought of estate planning conjures up images of complex legal documents, intricate financial planning and a maze of bureaucratic processes. This perception of complexity can be so overwhelming that it deters individuals from even beginning the estate planning process. The task of organizing one’s entire financial life, considering all possible future scenarios, and making decisions that have long-term implications can indeed seem daunting.

To mitigate the feeling of being overwhelmed, it’s helpful to approach estate planning as a step-by-step process. Breaking it down into smaller, more manageable tasks can make the process less intimidating. The first step could be as simple as taking an inventory of your assets and liabilities. This includes listing out all bank accounts, investments, real estate properties, insurance policies and any personal valuable items. It also involves understanding your debts and financial obligations.

The next step could involve clarifying your goals and wishes. This includes thinking about who you want to inherit your assets, how you want them to be distributed and making provisions for the care of minor children or dependents, if applicable. It’s also important to consider scenarios such as incapacity and who would make decisions on your behalf in such instances.

elder lady looking distressed

Seeking professional assistance is another key strategy to simplify estate planning. A qualified estate planning attorney can provide invaluable guidance, helping to navigate legal complexities and ensuring that all documents are compliant with state laws. Financial professionals can also play a crucial role in providing advice on how to structure your assets to achieve your estate planning goals. These professionals can provide personalized advice based on your unique circumstances and needs.

Furthermore, utilizing available resources and tools can also make the process more approachable. There are numerous online resources, templates and guides that provide basic information and can serve as a starting point for understanding estate planning. However, these should be complemented with professional advice to ensure that your plan is comprehensive and legally sound.

It’s also important to remember that estate planning is not a one-time task but an ongoing process. Life changes, such as marriage, divorce, birth of children and acquisition of new assets, necessitate regular reviews and updates to your estate plan. This approach ensures that your estate plan remains relevant and aligned with your current situation and wishes.

How can I deal with the fear of making the wrong estate planning decisions?

The prospect of making decisions that could have long-lasting effects on one’s family often instills a sense of trepidation in individuals considering estate planning. This fear is rooted in the concern that one might make irreversible mistakes – decisions that could inadvertently spark family conflicts or result in unfair asset distributions among heirs. These worries can be so paralyzing that they prevent individuals from engaging in any form of estate planning, which ironically can lead to the very outcomes they fear.

The anxiety surrounding these decisions is understandable. Estate planning involves making choices about dividing one's life's work and assets, and these decisions can significantly impact family dynamics. The concern that loved ones might feel slighted or that disputes might arise after one's passing can be a substantial mental barrier.

elderly couple having a disagreement

To address these concerns, it’s crucial to approach estate planning with a strategy that encompasses both emotional and practical considerations. One effective way to do this is by seeking professional advice. Estate planning attorneys, financial professionals and tax professionals can provide invaluable guidance. They bring expertise in the legal and financial intricacies of estate planning and can offer objective advice on how to structure an estate plan that aligns with your wishes while also being fair and legally sound.

Professionals can also help in navigating complex family dynamics. They can suggest strategies for equitable asset distribution and advise on ways to minimize potential conflicts. This might include creating trusts with specific stipulations, setting up a family meeting to discuss the estate plan or even involving a family therapist in cases where tensions are high.

Utilizing educational resources is another way to mitigate the fear of making the wrong decisions. There are numerous books, online resources, and workshops available that provide information on the basics of estate planning. These resources can help demystify the process and provide a foundational understanding of key concepts and options.

Involving family members in the estate planning process can also be beneficial. Open communication about your wishes and the reasoning behind your decisions can alleviate misunderstandings and reduce the likelihood of conflicts after your passing. This dialogue need not include specific figures or detailed allocations but should convey the overall intentions and principles guiding your estate planning decisions.

Another aspect to consider is the flexibility of estate plans. Many fear making the wrong decision because they believe these choices are permanent and unchangeable. However, most aspects of an estate plan can be revised as circumstances change.

Finally, it’s important to remember that not making a decision is, in itself, a decision. By avoiding estate planning, you leave the distribution of your assets up to state laws, which might not align with your wishes. This default scenario can often lead to the very conflicts and unfair distributions you are seeking to avoid.

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

Phone - 844.445.3422
Email - info@legacyassuranceplan.com
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