Do Not Delay Your Estate Planning

Keeping your Estate Plan Current for the Benefit of your Heirs

It’s not surprise to us in the estate planning world, but a recent study shows that only 26% of all wealthy individuals have a complete estate plan.  We totally understand.  There are plenty of reasons as to why to delay an estate plan; most of these reasons are really excuses.  There is a great article below by Barron’s that shows some of the reasons. See our estate planning page for more.

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Don’t Delay Estate Planning, for the Sake of Your Heirs

Do you need to make estate-planning decisions?

Only 26% of the 3,105 wealthy individuals surveyed in a 2016 study by RBC Wealth Management and Scorpio Partnership had a complete estate-planning strategy�”including an estate plan, a will, and a detailed philanthropic mission�”in place for transferring wealth to the next generation. Only 54% of those surveyed had even prepared a will, and most respondents with wills hadn’t updated them. In other words, $1.5 trillion of the $3.2 trillion to be passed down to the next generation in the U.S. is without direction.
Passing your wealth to heirs requires care. Start early, and then revise your initial strategy as you age. Illustration: William Waitzman for Barron’s
While it is utterly human to want to push off decisions that force us to reckon with mortality, Bill Ringham, a vice president of wealth strategy at RBC Wealth Management, claims that the real reason people avoid estate planning is much more mundane. Ringham, whose firm oversees $74.6 billion in assets, says people delay because they don’t know what they want to happen at a distant point in the future. They reason that they’ll have a clearer picture about what heirs should get at some later date.

Don’t let that stop you from getting started, he warns. Accept that crafting the perfect wealth-transfer strategy from the get-go isn’t possible, and that it will need to be adapted to changing circumstances as you age. For example, a client with $6 million created a plan to distribute his wealth to his children when they turned 25. But as the children grew up, he realized that inheriting millions of dollars at that age could become a real burden. So he changed the transfer time to when the youngest child turned 40. Lesson: People too often overlook the fact they can periodically update their strategies, which is exactly what they should be doing.

Even with a plan in place, your heirs need to know what’s going on. Ringham says that “people prefer to talk more about the big picture, omitting important facts like the family’s net worth or a ballpark estimate of the inheritance.” The study shows that 60% of those surveyed said they are uncomfortable sharing details about the wealth transfer with their heirs; 13% preferred not to talk about it at all.

But the gritty details are key in helping an heir prepare for an inheritance, says Ringham. Without detailed conversations, it’s easy for wrong assumptions to get built into estate plans, and they potentially could be costly to undo.

One RBC client wrote his 30-something son into the estate plan as the future owner of his business, without any prior discussion. Encouraged by an advisor to talk directly with his son, the client finally asked, “Are you interested in owning the family business?” He was floored when the subsequent discussion revealed that the son was interested in the business only if his father continued working in it. So the client removed the language that transferred the business to his son, and decided to put the business up for sale before he retired.

We can’t say it enough: Start planning early, however imperfectly. Those who have inherited wealth themselves do the best job preparing their heirs, in all likelihood because they were frustrated by how the inheritance process went for them. Furthermore, research shows that the earlier in life the conversation with heirs starts, the smoother the wealth transfer goes.

Of those surveyed, 66% were confident in their knowledge about wealth and money when they started learning about the family’s fortune before age 18. The level of confidence steadily declined as the age bracket of information-sharing increased. The teenage years are the ideal time to have those financial conversations and prepare your children for the wealth transfer, Ringham says. The average person starts learning financial literacy at 27, a decade after the optimal starting point.

It’s simple: Strive to do a better job�”for the love of your heirs.

Estate Planning Lawyers in Leawood

Estate Planning is all about peace of mind. What estate planning is all about is discovering the right tools to implement your standard needs. We do this using the most up to date devices so that we can prepare a customized plan at the lowest possible cost.
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The Eastman Law Firm is an estate planning law practice. We concentrate on estate planning so that you can be assured that you are getting the most up to date methods.

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The Eastman Law Firm
Estate planning attorneys, focusing on Wills, Trusts and Probate law.
4901 W. 136th Street, Ste. 240
Leawood
KANSAS (KS)
66224
United States

Phone: (913) 908-9113

Hours:
Mon-Sat 8am – 5:30pm

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Blue Springs location at:

1200 NW S Outer Rd.
Blue Springs, MO 64015.
Call Jerry at (816)224-3133

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