I spend a lot of time educating people on the importance of estate planning to their lives and their families, but I often feel like it falls upon deaf ears. When most people think of estate planning, they think of the elderly or people with Daddy Warbucks money (what can I say, Annie was my all-time favorite movie as a kid). They never once think of it as something they could actually use for themselves. So, I decided to put a different spin on it this time in hopes that it’ll become relatable to the everyday person.
Since it seems the masses are all about setting goals and crushing them, allow me to lay out the goals (or purpose) of estate planning, to see if they align with any personal goals you have for yourself and your family. And if they do, you need to consult an attorney about having an estate plan drafted.
- Fulfill property transfer wishes. This is the main goal of estate planning. Your estate is made up of all your property (real, personal and intellectual) minus anything you owe – assets minus liabilities. The heart of estate planning is making the determination as to who gets what and when. Do you have any clear goals as to who should inherit your property? What happens if that person passes away before you do, have you considered alternate beneficiaries? How can you be sure your wishes will be carried out in your absence without written instructions providing guidance? You can’t.
- Minimize transfer costs and taxes. Most of us are always on a mission to save money and avoid taxes. These are life goals. And if you already feel like you don’t have much to leave your loved ones behind, don’t diminish the value of what you do have to leave, by allowing it to be swallowed up by taxes, transfer fees and other unnecessary costs. Plan ahead.
- Maximize net assets to heirs. You want to leave your loved ones with something worthwhile. After all, you worked your entire life to get everything you have, and it would be a shame to pay it all to Uncle Sam, the courts, and attorneys, all to the detriment of your loved ones. You want them to benefit as much as you did from your assets. Nobody likes court. The goal is to avoid probate at all costs. Probate lawyers are very expensive; coupled with court fees and the fact that a typical probate proceeding lasts for at least a year prior to the distribution of the estate, you can just see money being squandered away.
- Provide necessary liquidity at death. We see it all the time. A loved one passes away suddenly, and everyone starts freaking out. There is no money to plan a funeral or burial and people start creating Go Fund Me accounts. Please be advised that “Go Fund Me” is not an estate planning tool. There are no guarantees that it will fund anything, and you’ll still be left in the position of trying to figure out how you can afford to pay for death services. Not only that, what if the person who died was the primary caregiver of minor children? That means cash would need to be readily available to satisfy the immediate needs of the family. This is where life insurance policies, IRA’s, stocks and bonds, etc. come in handy. If all of your property is being transferred by will, no one is getting anything until the administration of your estate is finished. And like I said before, that could take up to a year.
- Fulfill personal wishes surrounding death. I personally would like to be cremated. I don’t like the idea of my body rotting underground. I would much rather be put back into the universe. My family on the other hand does not believe in cremation. They would stick me in a box 6-feet under, just so they could have a place to come visit me when they were feeling sad or lonely. They would still do it, knowing I want to be cremated, and I wouldn’t be here to defend my wishes. But, my estate plan will be. And it will detail all of my preferences concerning the disposition of my body. This is typical behavior of family members when they lose a loved one. They are concerned with their needs and desires because they are still left to deal with them. And although they (probably) mean no disrespect, what you would have wanted may not come to light if it’s not in line with what they would have wanted for you. Unless, they have no choice with regard to the matter. And your estate plan would leave them no choice.
Are you starting to see how an estate plan could benefit your future and that of your kids, family and loved ones? I know you probably don’t like to spend too much time thinking about your untimely death, but it’s certain to happen at some point, unfortunately, so you may as well be ready for it. Live your best life while amongst the living and beyond!
Lerae Funderburg, Esq. is the Managing Attorney at Funderburg Law, LLC, an Atlanta based boutique law firm, specializing in estate planning, entertainment, and business transactions. Please contact her office if you would like to schedule a Family Planning Consult to discuss your estate planning goals and needs.