What’s Stopping You from Updating Your Estate Plan?

By Mary Lago, CFP®, CTFA, Chief Wealth Strategist
Principal, Ferguson Wellman Capital Management

It is easy to put off creating or updating an estate plan. Most of us believe we have at least a bit more time before it will be necessary and the excuses are obvious and plentiful. Here we outline common impediments and corresponding benefits of maintaining a relevant plan with the intent of encouraging us all to take on the challenge.

Impediment: It can be uncomfortable to think about death.
Benefit: Completing an estate plan can bring peace of mind by helping ensure your assets go to the people and causes you choose. It also gives you a chance to review your resources and consider how they can best support your lifestyle, your family, charitable goals, and develop stewardship skills in future generations.

Impediment: I’m not sure which attorney to hire, and I know there will be legal fees.
Benefit: Working with an estate planning attorney creates a valuable resource for your heirs and can reduce their burden during a difficult time. Without a valid plan, state intestacy laws determine who receives your assets, often through a more complex and costly court process.

Impediment: I haven’t finalized who should receive my assets or when they should receive them.
Benefit: Most estate plans use revocable documents, which means you can update them as long as you are living and have capacity. You are not locking yourself into permanent decisions but rather putting in place a framework that can evolve over time. A customized plan is far more likely to reflect your wishes than relying on state default rules.

Impediment: My children are still young, so I want to wait until they are older.
Benefit: Estate planning is especially important for parents of minor children. A plan can name guardians and establish trusts to provide for health, education, maintenance, and support. It can also define when children gain greater control over assets and communicate your values through the provisions that you make.

Impediment: I’m not sure who should serve in important decision-making roles.
Benefit: While it may be challenging to identify those we believe are qualified to manage our affairs, we can all identify people we wouldn’t want in charge. Creating a plan lets you choose who will manage your affairs, when needed, rather than leaving those decisions to chance or to the courts. This matters not only after death, but also during life if you become unable to act for yourself. Naming trusted decision-makers can help protect you from fraud, mismanagement, and unnecessary conflict.

Impediment: I don’t want to think about estate tax planning right now. Can’t this be dealt with later?
Benefit: When it comes to estate taxes, ignorance is not bliss. Advance planning can significantly reduce taxes. Lifetime gifts generally avoid state-imposed estate taxes and may lower exposure to the 40% federal estate tax impacting larger estates. For couples, careful planning may eliminate taxes at the first death and mitigate taxes for heirs when the second spouse dies.

While we won’t suggest that estate planning is fun, we do believe it can be deeply satisfying and hope we have shared enough of the benefits to override the impediments and help you move forward.

Disclosure

Ferguson Wellman does not provide legal, tax, insurance or medical advice. This material has been prepared for general educational purposes only and not as a substitute for qualified counsel who can determine how this information applies to you. We help our clients by providing the names of independent estate planning attorneys, identifying common considerations for discussion and sharing key financial data to support thoughtful planning with selected counsel.