facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Estate planning isn't only for the wealthy Thumbnail

Estate planning isn't only for the wealthy

We've all read or heard the stories: someone passes away without a will, and potential heirs engage in a drawn-out legal battle that can take years to resolve. The emotional toll is immeasurable, with relationships suffering irreparable harm that can last for generations.

As highlighted recently in the Wall Street Journal, “The Brady Bunch Breaks Down: Estate Fights Tear Stepfamilies Apart—In Standard Estate Plans, a Surviving Spouse Often Has No Legal Obligation to Stepchildren,” inadequate planning can have devastating consequences for blended families.

One of the areas I specialize in is pre and post divorce planning.  Many times this does indeed involve blended families and if one doesn’t plan carefully, it can have devastating results.

Check out this other blog article, We Lost Our Million Dollar Beach House to see what I mean.

Getting back to the Brady Bunch, Carol Brady wouldn't forsake Mike’s three boys if her beloved husband passed first. Even their housekeeper Alice, who became part of the family, would be taken care of. But TV and real life don’t always line up. In today’s world, Greg, Peter, and Bobby could be left high and dry without a concrete written plan. The implications are real and immediate.

Without a will or trust, the state decides how your estate is divided and who will care for your minor children.

Only one-third of Americans have a will or a plan to distribute their assets after they die, according to a new survey from Senior Living Referral Service Caring.com. Another survey by USLegalWills.com found that almost 9% had an out-of-date will, while a staggering 63% had no plan in place. In other words, over two-thirds of Americans have a significant gap in their financial and estate plan. Don't be part of this statistic!

But you might think that only the wealthy need an estate plan. Not so. One in five Americans with investable assets of $1 million or more don’t have an estate plan, according to a recent Charles Schwab survey.

Many famous individuals, both young and old, have died without written plans, including Aretha Franklin, Prince, Michael Jackson, Bob Marley, Jimi Hendrix, Sonny Bono, Kurt Cobain, and Amy Winehouse. Even Abraham Lincoln, a lawyer, didn’t have an estate plan.  Under the laws of Illinois, his estate was divided equally between his wife and two sons.  This was probably okay but what if Lincoln had a child from another marriage or his wife Mary needed more assets to survive?

Estate planning isn't only for the wealthy. Dying intestate—without a will—has consequences no matter where you live. How your affairs are settled depends on the state in which you reside. This is especially painful if there are unmarried partners, stepchildren, or a parent’s own child who may lose an inheritance.

Stop procrastinating. If you have recently crafted an estate plan with an estate attorney or updated your will, congratulations. A holistic financial plan includes a succession plan. If not, let's get started. Estate planning requires us to prepare for the inevitable. Without a plan, your loved ones will have to guess your intentions in an already difficult situation. Even if potential heirs are on good terms, money has a way of creating divisions. I’ve seen it first hand.

Key Takeaways

  • Common estate planning documents include wills, trusts, powers of attorney, and living wills.
  • Everyone can benefit from having an estate plan, no matter how small their estate.
  • Estate plans must be updated after significant life events such as a divorce or death of a spouse.

What is a Will?

A will is a legal document stating how you want your executor to distribute your assets after you die. Your estate will go through probate, the legal process for reviewing the assets of a deceased person and determining who inherits what, whether you have a will or not. A will ensures the executor will honor your wishes. It lists your assets, bank and brokerage accounts, property, and more. Without a detailed document, potential heirs may have to search for assets spread across states and even countries. Designated beneficiaries for various accounts, such as IRAs or life insurance, generally supersede one’s wishes in their Will.

What is a Living Will?

A living will is written, legal instructions stating your preferences for medical care if you are unable to make decisions.

What is a Trust?

A trust is a legal contract that allows another person (the trustee) to hold property for you (the grantor). This is typically so the beneficiaries can use the property in the future. Trusts can be revocable (changeable) or irrevocable (non-changeable).

What is a Living Trust?

You create a living trust to hold assets before and after your death.

What is a Testamentary Trust?

A testamentary trust is created by the will and only becomes effective after the grantor’s death.

Power of Attorneys

A durable power of attorney enables your agent to act on your behalf if you become ill or are unable to make decisions. For example, a durable financial power of attorney allows your agent to manage your financial affairs if you become incapacitated. A durable medical power of attorney allows you to appoint someone to make decisions about life-prolonging care, treatment, services, and procedures.

DIY Hazards

Talking to your brother-in-law that is handy with a painting project is probably okay (Assuming you’ve seen his work!). However, going some “online do it your self option” when it comes to estate planning isn’t advised.  Think Penny Wise and Pound Foolish.  The knowledge and experience of a good estate planning attorney is money well spent.

Prepare Your Heirs

You don’t have to divulge all the juicy  details, but informing beneficiaries opens the financial lines of communication, reducing the odds of a contested will and promoting family unity at a difficult time. Surprises breed resentment, which can lead to unwanted consequences.

We recognize that estate planning is a personal process and can be overwhelming, especially with a large, blended, or separated family. Our objective is to initiate a dialogue, assist you in developing a plan, or motivate you to revise an existing one if needed.

Feel free to reach out to me personally to discuss.  We are also able to connect you with a great estate planning attorney that is a good fit for you. We can refer you to some great ones.

Want to schedule a complimentary call with me? Click on my calendar link HERE

Want to be added to our weekly Friday newsletter? Click HERE to sign up and check it out.

In good health.

All the best.

Rick Fingerman, CFP®, CDFA®, CCPS®



Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, health, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.

Schedule a Quick Call