The easiest problem to solve is the one that never happens. Yet, we spend a lot of time and money fixing things that could have been avoided. Sometimes, unnecessary difficulties are the result of procrastination. Other times, they are due to misplaced priorities. With investing especially, it is easy to lose sight of what is important. Yet, despite our efforts to help our clients head off unnecessary financial-planning failures, we see the same common problems every year.
Chief among these is putting off the drafting and signing of proper estate-planning documents. At the very least, we all need durable powers of attorney, advanced medical directives, and a will. According to The Conversation*, 68% of Americans do not have a will. We find that sometimes people think they have a will, even though they do not. These include wills written on computers but never printed and signed. Among couples, a spouse may say “I have taken care of that.” When the time comes, there is no will to be found.
How badly dying without a will (intestate) can be depends upon the state of residence. If assets are held jointly, or if assets have a designated beneficiary, then the cost of intestacy will be minimal. The surviving spouse should quickly see an attorney and create the proper documents. If not, a surviving spouse could lose more than half of the decedent’s estate. In Florida, for example, when the decedent has lineal descendants that are not also those of the surviving spouse, those descendants will share one half of the estate. That is not the case in Virginia, where a descendant who has children that are not in common with the surviving spouse will inherit two thirds of the intestate decedent’s estate, leaving only a third to the surviving spouse.
While the loss of assets for the survivors is often unintentional, the damage can be devastating. We are fortunate to live in a nation of laws. We have available to us the tools and techniques to justly address the interests of all of those we leave behind. If you are trying to reason your way through the conflicting interests of your estate plan, please call us. We can help. Remember, we are not attorneys and do not practice law. Always seek the advice of a competent lawyer.
*Weisbord, R.K., Horton, D.. "68% of Americans do not have a will." The Conversation, Online, May 19, 2020 8.13am EDT. https://theconversation.com/68-of-americans-do-not-have-a-will-137686. Accessed 12.02.2021.