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By Mary Lago,CFP®, CTFA, Chief Wealth Strategist
Principal, Ferguson Wellman Capital Management
It is easy to put off creating orupdating an estate plan. Most of us believe we have at least a bit more timebefore it will be necessary and the excuses are obvious and plentiful. Here weoutline common impediments and corresponding benefits of maintaining a relevantplan 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 helpingensure your assets go to the people and causes you choose. It also gives you achance to review your resources and consider how they can best support yourlifestyle, your family, charitable goals, and develop stewardship skills infuture 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 valuableresource 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 canupdate them as long as you are living and have capacity. You are not lockingyourself into permanent decisions but rather putting in place a framework thatcan evolve over time. A customized plan is far more likely to reflect yourwishes 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 minorchildren. A plan can name guardians and establish trusts to provide for health,education, maintenance, and support. It can also define when children gaingreater control over assets and communicate your values through the provisionsthat 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 arequalified to manage our affairs, we can all identify people we wouldn’t want incharge. Creating a plan lets you choose who will manage your affairs, whenneeded, rather than leaving those decisions to chance or to the courts. Thismatters not only after death, but also during life if you become unable to actfor 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. Advanceplanning can significantly reduce taxes. Lifetime gifts generally avoidstate-imposed estate taxes and may lower exposure to the 40% federal estate taximpacting larger estates. For couples, careful planning may eliminate taxes atthe first death and mitigate taxes for heirs when the second spouse dies.
While we won’t suggest that estateplanning is fun, we do believe it can be deeply satisfying and hope we haveshared enough of the benefits to override the impediments and help you moveforward.
Disclosure
Ferguson Wellman does not providelegal, tax, insurance or medical advice. This material has been prepared forgeneral educational purposes only and not as a substitute for qualified counselwho can determine how this information applies to you. We help our clients byproviding the names of independent estate planning attorneys, identifyingcommon considerations for discussion and sharing key financial data to supportthoughtful planning with selected counsel.
