Why Everyone Needs an Estate Plan

A number of surveys over the last few years report that between 55% and 70% of adults in the United States don’t have an estate plan or have a plan that is outdated. The reasons given for their failure to plan and/or update their estate planning documents are myriad and include:

• I don’t have the time.
• My estate isn’t large enough to worry about.
• Planning is too expensive.
• I don’t like to think about my death.
• There’s no estate tax so I don’t need an estate plan.

While it is true that some estates are larger than others and require more sophisticated planning, everyone needs an estate plan. As the adage goes, failing to plan is planning to fail. To drive the point home, here are some real examples of what you may be truly leaving to your heirs if you pass without a well-thought-out estate plan.

Consequences of Not Having an Estate Plan in Place

You may think that without an estate plan in place, the courts will take care of all the details during probate, and your family will be the first in line to receive your assets. However, such thinking can actually lead to foreseeable consequences.

The following scenarios, which happened to real people who did not have an estate plan, show how this choice can go wrong.

Death Causes Fights Among Siblings

“One client was a business owner with a $3 million estate. He passed away at age 62 with no will, no spouse, and no kids. Nine siblings were left to fight over his assets. The family of siblings was probably dysfunctional before, but this brought out the worst in all of them. The whole process was ugly and it took 18 months to close the estate.” — David Jackson, CFP, Kansas City, MO

Children Get Nothing, New Wife Gets Everything

“I had a friend whose father had remarried years after his first wife had passed away. The father had just retired when he suddenly required hospitalization. A week later, he died. He had no will, and at that time in Massachusetts, the default was that the current spouse got everything. The children were left with nothing — the new widow was nervous about having sufficient assets for the rest of her life, and so would not disclaim any of the inheritance. As a result, the widow and the children didn’t speak to each other for years.” — George Gagliardi, CFP, Lexington, MA

Life Partner Left Without Legal Standing

“My maiden aunt lived, worked, and died about 25 years ago in another state without leaving a will. I know her intentions were to leave her assets, including their home, to her life partner, but she never did the paperwork. It took three years to settle everything because her siblings and parents had passed and the nieces and nephews were scattered all over the country. Imagine the heartbreak for her partner of having to sell the home and move since she could not afford to buy the house from the estate. All the funds were eventually disbursed to 11 others after time spent gathering death certificates and piling up legal fees.” —June Ann Schroeder, CFP, Elm Grove, WI

Life Insurance Ends Up in The Wrong Hands

“I had a client who was a married couple with two young children. The husband was my primary contact and, eventually, he became completely unreachable. After several months, I lost total contact. Eventually, I found out the husband ended up addicted to gambling and alcohol. They divorced and he committed suicide. His life insurance named ‘spouse’ as beneficiary, but she was no longer his wife. It ended up going to ‘next of kin,’ which was their children. Sounds great, but since they were minors and there was no will that established a trust, the state stepped in to manage the money. The mother had to go back to work and hire a nanny for the children. She asked the state if she could take the money that she was paying the nanny so she could stay at home with the kids. The answer was no.” — Clark Randall, CFP, Dallas

Heirs Are Left Trying to Find Everything

“As wise as my own father was, he never got around to creating a will or documenting his assets and their locations. He died one day before 9/11 and all these years later, I am still trying to finish up his estate. It was a monumental detective work just to try to figure out exactly what he had and where. To make matters worse, the assets were in multiple countries and continents.” — Kashif Ahmed, CFP, Woburn, MA

Partner Owes Enormous Taxes on Property

“I had a new client come to me to file a tax return including the sale of the home she had occupied for 30 years with her late common-law husband. Not having a lot of assets, he never felt the need to draft a will; and in order to take care of his common-law wife, on his deathbed, he sold her the house for $1. Unfortunately, this state does not recognize common-law marriage, so she did not receive a step up in basis and was liable for capital gains tax on the entire sale, less the commission and $1 basis.” — Nathan Zielonka, CFP, Newton, MA

Time-Consuming and Expensive Probate

“I had a client who had been married to his wife for over 35 years. His wife passed away in California without a will or trust, which meant court filings and probate, just to get him named as the rightful sole beneficiary of her assets. It took us quite a bit of legwork to get his wife’s assets transferred into his name, even once the court approved it. In the meantime, she had assets that we could not touch or manage. Her own death was an untimely accident, and she probably expected to live much longer than she did, but given the assets she and her husband had, not having an estate plan caused unnecessary expense and lost time.” — Juan Ros, CFP, Thousand Oaks, CA

Many, if not all of these situations, could have been avoided with some basic estate planning. So, before you put off your personal estate planning any longer, ask yourself, “If I die today, have I left my family in a financially sound, predictable situation?” If the answer is “yes,” then I applaud you. If the answer is “no,” then don’t delay any longer. Take the time to seek professional estate planning advice and get your affairs in order. Your family will thank you for it.

Do I Need an Estate Planning Attorney?

You may think that you do not need an estate planning attorney, but without one, you will be navigating the legal system alone. So much can go wrong, especially if you are not knowledgeable about what types of estate plans are essential for your particular circumstances.

Every client we work with has something that needs addressing in an estate plan. For example, you may have a beneficiary who has a disability, a family member who drinks too much or uses drugs, or someone with a spending problem. None of these will be considered if you do not create a plan or know what to include to protect both your assets and your beneficiaries.

Keep in mind that you have spent decades accumulating your assets. Why, then, would you want to leave the disposition or transfer of those assets to chance?

In other words, if you do not plan for this disposition and include all the necessary provisions in your documents, then statutory rules will direct the distribution of your assets. While these rules are in place to deal with such circumstances, none of the rules will take into consideration your unique family needs or your intentions.

It is up to you to prepare an estate plan that meets all the needs of your family and disposes of your assets according to your wishes.

A Virginia estate planning lawyer can provide legal advice to help you make the right decisions for your beneficiaries, protecting them well into the future.

If you do it yourself and leave all your assets to a disabled beneficiary, you unknowingly disqualify them from much-needed government benefits. They will need to spend down the inherited money before requalifying, so, in essence, that inheritance is wasted.

Working with a dedicated Virginia Beach estate planning attorney will help you maximize protections for beneficiaries while also addressing tax issues which can be imperative to the amount of actual assets they inherit.

Why Work With Midgett Preti Olansen

Working with Midgett Preti Olansen can help you avoid the many pitfalls of not preparing an adequate estate plan for your life circumstances.

With extensive legal knowledge in the area of estate planning, administration, business succession planning and litigation, our attorneys bring the knowledge required to make important decisions concerning the protection and disposition of your assets.

Our attorneys can recommend what documents to include in your estate plan to transfer your wealth to your loved ones according to your wishes. We can be a long-term ally to you and your beneficiaries. With 100 years of combined service, our attorneys remain committed to excellence in serving our clients, and you can trust us to do the same for you.

Testimonials

“Went to the law firm of Midgett Preti Olansen (MPO) for the first time last week. My appointment was with Mr. Nathan Olansen to have a new will and trusts set up for me. Mr. Olansen was professional, courteous, and knowledgeable. He carefully listened to my concerns and answered all my questions and gave me important advice. I never felt rushed during our first meeting either. Have several papers that I received from him which I will complete before I go back next time. Mr. Olansen informed me that we will have at least two more appointments. He told me the amount I would have to pay for his services and I felt it was a fair price. I found it very comfortable dealing with Mr. Olansen and I look forward to our next meeting.” – Susan H.

“Ann Larkin was professional, knowledgeable, and available for questions. She is also personable and understandable. I would not hesitate to call her for information expertise.” – Judy L.

“Todd Preti has handled our will and trust needs since 2013. He and his staff are very professional and are patient in answering our questions. I have recommended them to friends and will continue to do so.” – Roger O.

Additional Resources

• What is the Difference Between Trustee, Executor, and Power of Attorney?: Discover how a trustee, executor, and power of attorney differ and why you need each one in your own estate plan.
• Reasons Why You Should Hire a Professional Executor: Learn what the role of an executor for estate administration entails, how to select one for your particular needs, and why you should hire a professional to serve in this role.
• Understanding the Benefits of a Bloodline Trust: Find out what a bloodline trust is and how it can protect your family’s inheritance.

Control the Outcome of Your Assets

Now is the time to take action and prepare or update your estate plan to protect your hard-earned assets and your beneficiaries. Call 757-687-8888 or use our online contact form to schedule a consultation with one of our experienced Virginia estate planning attorneys today.