The COVID-19 pandemic has changed the nation’s perspective on many things, including estate planning. Caring.com’s 2021 Wills and Estate Planning Study found that middle- and older-aged adults are less likely to have a will now than they were just one year ago, while younger adults are 63 percent more likely to have one this year than they were pre-pandemic. Shockingly, 18- to 34- year-olds are now 16 percent more likely to have a will than those in the 35-54 age group. The younger generation was also the most likely to cite COVID-19 as the reason they started taking estate planning seriously.
Baby boomers remember Fleetwood Mac’s “Don’t stop thinking about tomorrow,” from their 1977 classic album “Rumors.” And band member Stevie Nicks is among a handful of rockers who seems to be putting those words into action. Recently, Nicks, Bob Dylan, Paul Simon, Neil Young and David Crosby all sold portions of their song catalogs. These multimillion-dollar deals are, in part, a response to changes in the music industry caused by streaming services and the pandemic’s effect on live performances. But the classic rock generation is also part of a bigger group: baby boomers. And once Dylan’s Never Ending Tour slows down, Robert Zimmerman will need an estate plan just like everyone else.
Here are three reasons why you shouldn’t leave your own estate plan blowin’ in the wind.
Estate Plans Are Comprehensive
Some folks use the phrase “estate plan” interchangeably with “last will and testament.” But your will should be just one part of a larger plan that protects you, your assets, your privacy and your heirs. At a minimum, a comprehensive estate plan includes:
—Last Will and Testament, which memorializes your last wishes and describes how you want your estate to be distributed to heirs and other beneficiaries.
—Power of Attorney, which authorizes someone of your choosing to act on your behalf while you are still alive if you are incapacitated and unable to make decisions.
—Healthcare Directive, which explains how you want to be cared for if you become incapacitated.
—Living Will, which designates someone of your choosing to make important medical choices for you if you are unable. In yourliving will, you can instruct your designee to use your healthcare directive as a guide, or you can describe the thought processes you would go through if you were making various decisions yourself.
For most people, it makes sense to also include:
—Revocable Trust, which is essentially a will replacement. Rather than directing assets toward the court system for a public and sometimes expensive and lengthy probate administration (as is the case for wills), assets are directed to a private entity called a trust. A revocable trust is just that—revocable. It can be amended anytime. Trusts can also provide distribution guardrails and asset protection from “creditors and predators” for younger beneficiaries. And separate trusts can be created for each of your heirs to allow for their needs to be met differently without introducing competition over the same resources.
Yes, it’s important to decide how you want your assets distributed after your passing. But an estate plan also protects you and your best interests and ensures that you’ll get the kind of care you want even if you’re not able to speak for yourself.
Estate Plans Save Your Heirs Time, Money and Headaches
If you set out your last wishes in a legally durable estate plan, your heirs are going to have a lot less to argue about—or worse, sue each other over. But even if your family is relatively drama free, an estate plan makes the process of settling your estate that much easier. When a deceased person doesn’t leave an estate plan behind, the state of residence becomes the executor. This can tie your assets up in court for years, and when minors are left behind, a complete stranger (the judge) will decide who will become their legal guardian.
Your estate plan will also determine the best ways to transfer your assets to your beneficiaries. Planning with your financial advisor, attorneys and tax professionals can help to minimize tax burdens by utilizing appropriate vehicles like lifetime gifting, donor-advised funds, charitable trusts and family trusts. Without that kind of planning, a generous inheritance could subject your heirs to an unnecessary and large tax bill. With the right planning and some time, even the wealthiest can legally avoid paying estate taxes.
Estate Plans Preserve Your Legacy
Retirement-age rock stars might be making headlines, but estate plans are not just for the rich and famous. Yes, the larger and more varied your assets are the more important an estate plan becomes. But, in addition to protecting your money, property and well-being, an estate plan can also help you preserve the things you’ve cultivated over the course of your life and career that your heirs will value more than money.
Many estate plans include letters to family or video testimonials where people pass down the values that have guided them. Some folks include charitable missions that they charge their heirs to continue. Others establish foundations, trusts and nonprofits that can inspire a family to keep doing good for generations.
Set up an appointment with our office today and let’s work together on a plan that will safeguard your life’s greatest hits. Schedule a virtual meeting at our website, go.oncehub.com/StewardshipColorado or call 303.500.1931. We are able to provide all your planning needs remotely, although our office is also open for in-person meetings.