Quick show of hands: Who will need an estate plan some day?
Obviously, anyone reading that sentence should raise their hand. Everyone will pass away eventually. Any assets they have, no matter how many or how few, need to get passed on to the next generation. Everyone's lives end this way, so no one can avoid it.
Even so, many people neglect to make an estate plan. It can be a serious mistake when it leads to disputes between their children or serious financial losses that they could easily have avoided. So why do people do it?
The main reasons
Everyone has their own reasons. Some are unique. More often than not, though, they give the same generic excuses over and over again. Some of the most common ones include:
- They feel like they're too busy living their life to plan for the future. They have jobs, families, friends and hobbies. They don't have time to think about something that may not happen for years or decades.
- They don't think they need an estate plan yet. After all, they expect to live into their 80s. They know that they need a plan eventually, but they'll make it when they get closer to the end of life.
- They still have living parents, and they expect to get an inheritance from them. They'll make their own estate plan for their kids after that happens.
- They think it's just too expensive and they don't believe they can afford to do it, even if that decision will cost their family more money in the long run.
- They don't feel like they have enough assets. They're not going to make an educational trust, for instance, because they don't have enough money to cover the kids' college costs, anyway.
- They are not worried about their family because of some other safety net, like a life insurance policy.
- They think that their marriage may come to an end, so they don't want to put the time into planning with a spouse who may not even be a spouse a year from now.
As you can see, there are major problems with all of these reasons. No matter how long you think you'll live, for example, you can't actually know. It may come a lot sooner than you think. No matter how much or how little you have in assets, you still want to have a plan in place to pass them on properly. The list goes on.
At the end of the day, this isn't something you want to put off. Many people do, but they're just asking for problems and complications for their family. Make it a priority to put your family first and look into all of the estate planning options you have.