Procrastinating is human nature, and we all do it.
As children, we put off homework until the last minute and often start studying the day before the big exam. As adults, we delay doctor appointments and dental exams. Couples procrastinate getting engaged and setting a wedding date.
Even when there are legal deadlines, we delay. According to the IRS, 25% of Americans wait until April 1 before they even begin doing their taxes. And an estimated 15 million people will file for an extension because they cannot meet the annual deadline they have known about for their entire adult life.
Procrastinating on work projects is commonplace and often legendary. Mozart wrote the famous opera “Don Giovanni” just three hours before the first performance. The ink was still wet on the musical score during the performance, and there was no rehearsal.
And Frank Lloyd Wright was commissioned to design a house but did not draw a single sketch for a year. Then the client announced a surprise visit for the next day, and Wright finished a few illustrations in two hours of the house that would become the iconic Fallingwater modern masterpiece.
But not all procrastinations end well.
Some procrastinations are harmless or mild. Your life will not be ruined if you turn in your sixth-grade science project a day late, although many sixth-graders will disagree at the time.
And some procrastinations can have immediate tragic consequences. Deciding to put on your seat belt later or putting off the doctor-order electrocardiogram can have terrible outcomes in an instant.
Procrastinating on financial and estate planning can also be immediately devastating when an unexpected family tragedy occurs, like death, stroke or sudden illness.
Even if you live a long life, putting off financial planning robs you of opportunities to build your assets over time. You might leave your family members less well off than you planned and may even have your estate distributed contrary to your hopes.
Here are a few reasons why we procrastinate financial and estate planning, how to overcome putting it off and how to ensure you build your assets and have them distributed according to your wishes.
Celebrities with no wills - everyone procrastinates
Young or old, rich or average income, celebrities or everyday people - everyone procrastinates. Astonishingly, about 70% of Americans do not even have a will, the most basic estate planning tool. Below are a few examples of what happens when celebrities procrastinated on their estate plans.
Pablo Picasso - no will
Picasso died in 1973 at the age of 91, with no will. His fortune included artwork, five homes, cash, gold and bonds. Because there was no will, it took six years and a cost of $30 million to settle the estate, which was eventually divided up among six heirs.
Heath Ledger's will not updated, daughter left out
Heath Ledger died in 2008 and was only 28. Ledger was a rising star famous for “The Patriot,” “A Knight's Tale” and his outstanding role as the Joker in the Batman movie “The Dark Knight."
Ledger executed a will in 2003, leaving half his estate to his two sisters and the other half to his parents. But in 2005, Ledger and Michelle Williams had a daughter, Matilda, and never updated his will.
Happily, there was no need for a court battle. In an incredibly giving show of family unity, the sisters and parents donated the entire estate into a trust for his daughter. Unfortunately, probate courts are filled with families that are not so unified.
Sonny Bono's estate still in dispute
Sonny Bono died in a tragic ski accident in 1998 at 52. Unfortunately, the singer and politician had no will at the time. His widow, Mary Bono, and ex-wife, Cher, argued over the community property.
Eventually, the court distributed the community property. But the two women are still in a legal battle to this day, decades later, over trusts that hold copyrights to his music.
Chadwick Boseman's widow has to fight in probate court
Chadwick Boseman, famous for playing the roles of the Black Panther and Jackie Robinson, died at age 43. He bravely battled colon cancer for three years. But during that time, he never prepared a will. His ill-prepared widow had to file probate documents with the court and fight to gain control of the estate.
Other famous people who died without a will include Abraham Lincoln, Martin Luther King Jr., Aretha Franklin, Michael Jackson, Prince, Howard Hughes and many more.
So why do celebrities and regular people procrastinate and die without a will, little financial planning and no estate planning?
Why do people procrastinate financial and estate planning? Here are six reasons:
1. There's plenty of time - just not now
People tend to think they have plenty of time to get things done - later.
Many young people have the “Immortal Complex.” They are young and healthy and half a century away from death, funerals estate planning or anything related. They are busy with college, grad school, weddings, starting businesses and families. They are taking vacations, skiing and boating.
Financial planning might be a little important soon - but not urgent. And wills and estate planning are for older people, or maybe to start when you are in your 40s or 50s.
Meanwhile, older folks know they are not immortal and are closer to the end than the beginning. And they know they need a will or at least a plan. But many feel healthy and have no urgency to get it done now. Maybe they will in a couple of months or next year, but not this week.
2. Let's avoid family arguments
Many parents procrastinate estate planning because they believe it will start a family fight.
Which child should be the executor of the will? Who should be the trustee? How do you divide the assets equally? Should the parents include the children in the planning stage?
3. Estate planning is overwhelming
Many people feel that estate planning is complex and the whole process is overwhelming. Estate planning documents are confusing. They have heard their friends talk about living wills, wills, irrevocable trusts, revocable trusts, pour-over wills, QTIP trusts, charitable trusts, probate, powers of attorney, executors, trustees and more.
The terms are confusing, and the legal documents must be impossible to understand. They don't have time to tackle such a complex process today. Maybe later is better. Ironically, these same people are often relieved at the ease after having a qualified financial professional and an experienced estate planning attorney set up their plans.
4. We are just too busy right now
Sure, estate and financial planning are important, but we are just too busy now.
The kids are in school, which takes up most of the day. One or both of the spouses work. After school, it's time for soccer, cheerleading, music lessons, errands, shopping, cleaning and making dinner.
On the weekends, it's family time, going to the beach or eating out occasionally. There's yard work, taking care of the car and working on the house. Then it's Monday, and it starts all over again. We just don't have time right now.
5. Thinking about death is difficult
Thinking about death is uncomfortable for many people. Contemplating your own mortality is one thing but imagining your family without you may be even more challenging. And some people are superstitious and believe avoiding thinking or talking about death is safer by not tempting fate.
Many spouses do not want to imagine life without their partner. Some day they will have to talk about it - but not today.
6. Estate and financial planning is too expensive
Unfortunately, people think establishing financial and estate plans is costly and too expensive. Not only is this not the case, but they realize later that the actual cost was not establishing a financial plan to grow their assets and an estate plan to distribute those assets to their loved ones properly. However, by then, it's too late to do much about it.
The tragedy of waiting too long
The tragedy of procrastinating financial and estate planning can come when you realize it is too late to do anything. Or, even worse, your loved ones find out after you pass away that they have to fight to get the assets you wanted to be distributed to them.
Putting on your seat belt after the accident is useless. Getting an electrocardiogram after your heat attack is not of much use. And the more you put off your financial and estate plans, the less helpful they will be.
Financial planning
Putting off financial planning when young is one of the worst financial decisions ever. By doing so, you miss the magic of compound interest.
For example, if you invest $1,000 at 7% at age 20 and contribute $83 a month (around $1,000 a year) until retirement, then by age 70, you will have $465,000 in your bank account.
But if you wait until 30 to start, you end up with $225,000. And if you wait until 40 to begin, you only get $105,000.
To enjoy the power of compound interest sooner is better, and procrastination is the worst thing you can do.
If you wait until your 50s or 60s, financial planning is crucial. There are still things you can do, and a qualified financial professional can explain your best options. But the time to act is now.
The unexpected tragedy
Unexpected tragedies happen every day. People die in car crashes, die from heart attacks, have strokes, become incapacitated or develop a terminal condition or illness. And financially, people lose their jobs or have a financial reversal.
No one ever expects these things to happen. But your family suffers the consequences if your estate plans are not in order when you die. And if your estate plans are not completed before you become incapacitated, your family's options are limited.
Avoiding fights about capacity and undue influence
One of the primary fights over inheritances and estate planning is based on charges of diminished capacity and undue influence. The earlier in your life that you prepare a will and establish estate planning, the less likely these assertions will be effective.
If you establish your plans when you are 40 and update them yearly, charges of undue influence and diminished capacity are rare. But, if you wait until you are 89 to prepare a will, the odds are very high for such a challenge.
Protecting your loved ones
If you fail to have your estate plan in place, you cannot protect your family by choosing the timing and manner of distributions of your assets. If done correctly, you can protect your family from financial creditors and predators. But, if your plan is not in place, they have no such protection.
Special needs children
Often an inheritance will disqualify a special needs child from government benefits. An experienced estate planning attorney can help you with a special needs trust to protect a physically or mentally disabled child's eligibility for need-based government benefits such as Medicaid or Supplemental Security Income.
Family fights over inheritance
The lack of estate planning almost always ends with your loved ones arguing over who gets what. Sometimes there are minor disagreements, but often the families have major confrontations as sibling rivalries rise to contentious levels. Parents who avoid estate planning for fear of family disharmony ironically cause the very thing they were trying to avoid.
Your best next steps to avoid the tragedy of procrastination
We are all human, and we all procrastinate.
But we all also love our family members. We want to know they will be well-provided for after we are gone and that our assets are distributed according to our wishes.
The only way to ensure that is to establish a financial and estate plan now.
While you cannot predict tragedies like accidents or diseases, for your peace of mind now and your family's financial future, you can be prepared in advance with proper estate planning. And, financially, the sooner you take advantage of compounding interest and other options, the healthier your financial growth becomes.