Why don't more people plan better for their eventual demise — and write wills? They're unwilling to face their own mortality, unable to decide who will be their kids' guardian, under the mistaken impression that they're not rich enough, and filled with inertia, says Joe Falanga, president of the National Association of Estate Planners and Councils.
That's unfortunate. "Without at least a basic plan in place, you don't know if your estate is going to be distributed the right way, to the right people," says attorney and estate planner Bob Alexander, treasurer of the NAEPC. "Without this, they're going to cause their families a lot of problems."
But some Americans think going through with the planning will somehow hasten their own demise. "Some people have the fear that if they do it, they're going to die," says Mark LaSpisa, president of Vermillion Financial Advisors. "It's kind of gruesome to some people to think about the topic and to plan for it." And yet, according to the new Associated Press-LifeGoesStrong poll, only 40 percent of us midlifers have a will.
But being unprepared for death is not our only problem. According to the poll many of us are also unprepared for a major illness: the poll shows that only 34 percent have a health care proxy.
This lack of readiness for illness or death is a huge barrier. "Who wants to think about actually dying?" says certified financial planner DeDe Jones, managing director of Innovative Financial. "People like to live under the illusion that they're going to be here indefinitely."
When it comes to advance healthcare directives, it often boils down to seeing an ill relative. "They've seen Uncle Joe linger. They've seen someone else in a long-term care facility," says Jones. "They don't want that to happen to them."
Some people simply procrastinate until a life event — such as the birth of a child, a divorce, or a financial windfall — motivates them to take action, says LaSpisa. "Something happens, and they go, 'OK, I know I'm busy, but I really want to get this taken care of.'"
Many people fail to do estate planning until they're motivated by a plane ride or surgery, says Alexander.
Often the biggest impediment is the kids. "Many people disagree over who should be the custodian or guardian of their children," says Falanga. As a result, he says, some wills don't get signed.
In addition, many Americans erroneously think legal wills are just for the wealthy. And the numbers bear this out. The AP-LifeGoesStrong poll found that 50 percent of Americans with incomes above $100,000 have a will whereas only 25 percent of those with incomes below $50,000 do. (This disparity is less stark when it comes to long-term care insurance: 13 percent in the under $50,000 group have it compared to 17 percent with incomes between $50,000 and $100,000 and 21 percent with incomes above $100,000.)
It's possible to use websites — such as Quicken's WillMaker — to make wills cheaply. But estate planners and certified financial planners typically advise that people see a lawyer, too. For extra help, see www.estateplanninganswers.org . But people need to make sure they've met their state requirements for getting enough witnesses.
Many people simply never get around to writing a will. That's a problem. "The state will dispose of your assets for you," says Falanga.
And who wants that? "The laws of the state will determine who gets what, when and how," says LaSpisa. "It may actually meet [people's] needs — but it may not."
That's true in other countries, not just in the United States. Think of "Girl with the Dragon Tattoo" author Stieg Larsson, whose partner of three decades, Eva Gabrielsson, was left with nothing since he had written bestsellers — but no will. As a result, under Swedish law, his estate went to his father and brother.
People should rewrite wills when their economic situation or relationships change, says Falanga. (The American Bar Association recommends a revision after one of five D's — a new decade of life, a death in the family, a divorce, a diagnosis of a serious illness, or a decline in condition.) They also need to shred any copies of the old one to prevent confusion later.
After writing or rewriting a will, people need to keep a copy in a safety deposit box at a bank. Typically an attorney will also retain a copy. Many people also like to keep a copy in a home desk, along with burial and cremation instructions and email passwords and user names with the will, says Falanga.
Encourage offspring 18 and older to make wills, too, says Falanga. Some people mistakenly think they don't need the document until they're married with children. Not so.
By congressional proclamation, the third week of October is officially national estate planning awareness week. Take action before then. To find an estate planner, visit the NAEPC's locator.
In the end, "no one dies without a will," says Jones. "If you haven't created one yourself, the state in which you live has created one for you."
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