Did you know that 80% of Americans do not have an estate plan? It’s a shocking fact. Likely this is because most people do not realize how important it is to have an estate plan in place should the unexpected – or even the expected – occur. If you are over 18, you need an estate plan. Here’s why:
Most people think an estate plan is just about transferring assets to beneficiaries when you die. An estate plan works for you while you are alive and after you pass.
A sudden illness, an accident, or an unexpected death can hit at any time and throw your life into chaos. If you don’t have estate planning documents, you could find yourself or your family in financial ruin or having the courts step in to make quick, life-changing decisions on behalf of you or your loved ones.
An estate plan includes a Will, Power of Attorney, Revocable Living Trust, and Living Will/Health Care Proxy. There are also pet documents – a Pet Power of Attorney and Pet Trust – to protect your pets.
“We’re Young and Have Hardly Any Assets”
One of the misconceptions about an estate plan is that you must be wealthy or own a lot of things. You don’t. An estate plan protects everything you own – no matter how little or how much. And it protects your choices.
Here is a story about a young, everyday couple, Reno and Susan. They have been married five years and have a 2-year-old daughter, Jeannette.
One day, Reno and Susan are driving on the highway with Jeannette and their dog, Tigger, in the backseat. Their car crashes. Reno and Susan perish, but Jeannette and Tigger survive.
Before their death, the couple rented an apartment, owned a car, had modest savings, and a lot of debt. With these circumstances in mind, let’s look at two scenarios: what happens if the couple does not have an estate plan, and how things proceed if they do.
Without an estate plan:
- No guardian appointed – Their respective parents would need to hire lawyers to battle in court for custody of Jeanette.
- No Will – The families fight over limited assets, have a falling out, and are forever divided.
- No Pet Power of Attorney – Since neither parents are dog people, they might send Tigger to an animal shelter.
- No Digital Vault – It takes weeks to figure out there was no estate plan and life insurance because the couple never shared with anyone critical information and documents. Neither set of families knew their last wishes .
All this heartache could have been avoided if Reno and Susan used an affordable tool like Gentreo to create an estate plan.
With a Gentreo estate plan:
- Appointed a guardian – Reno and Susan would have lovingly designated the most suitable guardian for toddler Jeanette. No lawyers required and no custody battle.
- Having a Pet Power of Attorney – Tigger would have gone to a loving home where Jeannette could have regular visits.
- Documents stored in Digital Vault – All estate planning documents and other important critical information were readily available immediately after the sudden tragedy because Reno and Susan stored and shared their estate planning documents through their Gentreo Digital Family Vault.
There was no unnecessary delay in knowing the couple’s last wishes. This allowed both families to share their sorrow, move on, and be close.
“I’m Young, I Don’t Need an Estate Plan”
Just because you are young and healthy, you never know when a crisis will strike.
Jessica is a bright young college student who just turned 18. She knows what an estate plan is but doesn’t believe she will need one until she is older.
While walking home from class one day, she is struck by a car crossing the street. Jessica is rushed to the hospital in critical condition and has fallen into a coma.
Without an estate plan:
- No Health Care Proxy – Because Jessica’s parents cannot agree on immediate, critical health care decisions on her behalf, they will have to petition the court for guardianship, costing them critical time, money and anguish.
- No Power of Attorney – Jessica’s tuition will be automatically deducted from her bank account within days of the accident. The parents will need to request court approval for conservatorship, which will take too long to avoid delaying or stopping the auto payment.
- No Living Will – Jessica often told friends that she would not want life sustaining assistance or resuscitation if it was confirmed that she was brain dead. Because she does not have a Living Will, her wishes cannot be honored – the court will decide her treatment.
With a Gentreo estate plan:
- Having a Health Care Proxy – Jessica’s mom can instruct the doctors about Jessica’s medical wishes.
- Having a Power of Attorney – Jessica’s mom was able to cancel the automatic tuition payment, keeping those funds available to help pay for her daughter’s medical care.
- Documents in Digital Vault – No time or money was wasted on indecision or searching for documents because Jessica’s mom had access to her daughter’s estate plan from the Gentreo Digital Vault.
“I’m Married, I Don’t Need an Estate Plan Because My Spouse Has One"
Most couples believe that since one spouse has an estate plan, the other doesn’t need one.
Judy and Raymond are an older, married couple. He is in great shape, but his wife of 50 years has advanced Parkinson’s disease including parkinsonian dementia. Raymond makes all of Judy’s health care decisions. One day, Raymond has a heart attack. Due to her illness, Judy cannot make health care decisions for herself or Raymond.
Without a Gentreo estate plan:
- No Health Care Proxy – The couple’s adult children must go to court to get legal authority to make health care decisions for both their parents, incurring steep legal costs and delays in providing treatment.
- No Power of Attorney – In order to manage Raymond’s money, someone needs to be his Power of Attorney. Even if all accounts were in both names, Judy is too impaired to do her own banking and pay bills. Once again, their adult children would have to petition the court to become the conservator for their mom and dad, so they have the authority to manage their assets.
Their parents’ lack of planning has now cost thousands of dollars in court and legal fees, plus time delays during a medical crisis and compounded the stress of an already challenging set of circumstances.
With a Gentreo estate plan:
- Having a Health Care Proxy – The couple chose one of their adult kids to serve as their respective Health Care Proxy to make their health care decisions.
- Having a Power of Attorney – Raymond chose one of their adult children to serve as their Power of Attorney, allowing access to their assets. In this case, the adult child could manage his/her parents’ finances.
- Documents Stored in Digital Vault – Because the Power of Attorney and Health Care Proxy documents were stored and shared in Judy and Raymond’s Gentreo Digital Vaults, all their children had access and there was no need to hire lawyers or seek conservatorship, saving valuable time and money.
A lot of stress and anguish for the family was avoided by Raymond’s proactive approach.
"My Adult Children Will Care for Me"
Many middle-aged couples are becoming caretakers for their aging parents.
Dave and Tam are married and juggle busy careers, two kids and a dog. They also care for Tam’s frail, ill parents who have no estate plan in place. Her parents are facing expensive in-home care.
Without an estate plan:
- No Trust – Tam’s parents are likely to need long-term skilled nursing care and don’t have a nest egg to pay for it. Dave and Tam might lose a lot of their savings to nursing costs if her parents do not have assets in a Trust.
- No Power of Attorney – Tam cannot fill out state applications for aging related support for her parents. She would also be unable to pay her parents’ bills.
- No Health Care Proxy – Tam would not be able to make critical health care choices for her parents.
- Documents Not Stored in Digital Vault – Tam has no idea where her parents’ assets and important papers are located. If one or both parents become incapacitated, their documents might not be accessible.
With a Gentreo estate plan:
- Having a Digital Vault – Assets and documents are all accessible in one place.
- Having a Power of Attorney – Tam can pay bills if her parents cannot make their own decisions.
- Having a Health Care Proxy – Tam can make medical decisions for both parents if their conditions worsen.
- Having a Trust – This safeguards the parents’ assets should long-term nursing care be required.
These scenarios are extremely common and could happen to anyone at any time. Many families have faced these catastrophic situations. This is why anyone over age 18 needs an estate plan whether you are old, or young, wealthy, or not so wealthy.
You can’t predict the future, but you can be prepared for it.
