Estate planning: you can’t afford to wait

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By Linda T. Cammuso

If you’re like most people, you probably have a list of reasons why you haven’t established your estate plan. The one I hear the most is “I can’t afford it.” Most people are shocked to learn that it is usually far more expensive not to have an estate plan — and sadly, many find out the hard way.

You might think, “But I don’t have an ‘estate!’” Well maybe you’re not Donald Trump, but an “estate plan” is not something for wealthy people; at its core, an estate plan is simply a set of documents that says who will get your assets when you die, and who will make your financial and health care decisions should you become unable to do so during your life.

Let’s look at what could happen to a person who does not have a will, trust, power of attorney or health care proxy (the four most common estate planning documents).

First, you might have noticed that two of those documents have nothing to do with death or assets — they involve decision-making during your life. If you lose the ability to make your own financial or health care decisions, as some do in their elderly years, your family must go to probate court to get a guardianship and conservatorship to make those decisions for you. These proceedings are public, time-consuming and very expensive; and worst of all, the person appointed by the court might not even be someone you would have wanted or trusted.

On the other hand, signing a power of attorney and health care proxy allows you to choose the person(s) to make these sensitive decisions for you and keeps your private affairs outside of the court system. And, the cost of these documents is on average less than five percent of the cost of a guardianship or conservatorship.

Wills and trusts on the other hand involve asset management and inheritance. These are the documents that determine who gets your assets and handle your estate affairs when you are gone.

If you do not have a will, state law determines who will inherit your assets. Without a will you also lose the ability to choose your executor. A will is essential to giving you control over these important issues. What a will cannot do, however, is avoid the expense and delays of probate. This is where a trust comes into play.

Avoiding probate allows you to keep your assets and beneficiaries out of the public probate court records. A trust also allows your beneficiaries to immediately access funds upon your death, and in some cases can even protect your assets from creditors.

These days no one likes the idea of spending money. But one upside to this tough economy is that we have all become more educated consumers. If you take the time to understand the estate planning process and the expense, delays and hardships that could result in the absence of planning, you’ll come to agree that you can’t afford not to plan.

Linda T. Cammuso is a founding partner at Estate Preservation Law Offices and an estate planning professional, she has extensive experience in elder law and long-term care planning. Linda may be reached at www.estatepreservationlaw.com or by calling 508-751-5010.