Many older workers focus on saving for retirement, paying off debt and looking forward to a slower pace. They don’t focus on wills and estate plans. That’s a big money mistake.
We don’t think about our estate plan as a financial document, but maybe that would make it more likely that people would actually get their wills, power of attorney and other related documents done. According to a recent article from Motley Fool, “Nearly Half of Americans 55 and Over Are Making This Huge Financial Planning Mistake,” nearly 50% of Americans 55 and older don't have a will. That puts their spouses and heirs in a terrible position.
While creating a will might be uncomfortable, delaying won't keep you from having to contemplate your own mortality. Not creating a will places your family in a tough spot, if something happens and there’s no will.
Another reason that people put off writing their wills, is that they don't want to make their children uncomfortable by getting them involved in the process. Adult children are also frequently hesitant to start a dialog about parents’ estate planning. Nonetheless, those discussions are important to have.
Wills, trusts and estate plans are not just for wealthy people. If you own anything, including a home, a car and any bank accounts, you need an estate plan and that includes a will.
If you don't have a will, you won't have the opportunity to direct the way in which your property is distributed. Instead, the laws of probate will instruct how your investments and belongings are disbursed after your death.
Once you have that will created, keep it in a safe place—no, not in a shoebox under your bed. Instead, buy a fireproof safe and store it there. In addition, give your children or loved ones access, so they're able to locate your will in the event that it’s required.
It’s common to get advice that you should store your will in a safe deposit box at your bank. That works only if your children or other trusted people in your life are permitted access to it. However, if you're the only account holder, your family may need to go through some legal machinations to get into it. When you enlist the help of an estate planning attorney to create your estate planning documents, she should also retain a copy of it on record. That's another great benefit to having an attorney create your will, rather than going it alone.
We do our taxes every year, whether we want to or not. Think of having your will done every three or four years, or whenever there’s a big change in your life or in the tax laws, as something like taxes: a necessary part of adulthood. If your adult children told you they weren’t filing taxes because they just didn’t get around to it, you would worry about what that might cost them. It’s the same for your estate plan. Get it done this year.
Reference: Motley Fool (February 16, 2019) “Nearly Half of Americans 55 and Over Are Making This Huge Financial Planning Mistake”