Vanilla
Sep 25, 2020
Who needs estate planning? Everyone, no matter the excuse.
Who needs estate planning? Everyone. But a lot of people avoid estate planning because they think they’re too young, they’re too busy, they feel estate planning is too expensive or too complicated, they’ve done it once in the past and don’t think they need to again, or they just don’t believe they have anything to plan for. The costs of making excuses not to estate plan can be high. Failure to plan means probate could keep beneficiaries in court for years while their assets are frozen and expenses mount. It could even mean that those they worked hard to take care of after their death will lose their assets.
Below are some of the groups of people who don’t think they need to estate plan, the common excuses they use to avoid it, and why it’s important for them to plan anyway.
Young people need estate planning because they often have more assets than they realize
Matt and Sara don’t have much. The newlyweds, who are in their mid-20s, just bought a modest starter home. They have two cars with corresponding loans, and Sara has a stack of student loan debt. Matt and Sara think they’re too young to plan their estate—after all, they have more debt than anything right now. They’ll just wait and plan their estate when they actually have something of value because they think they’re too young to need an estate plan.
“I’m too young to need an estate plan” is a common excuse people give for not planning. However, young people need to prepare for their futures, too. Young people should start estate planning as soon as they turn 18 and are legal adults. Adults need to plan for:
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Probate. If they are married, the surviving spouse can end up getting stuck in probate, all while grieving their significant other.
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Healthcare proxy and power of attorney if they become incapacitated. Once a person turns 18, their parents are no longer automatically considered to make their healthcare and financial decisions in the event they are incapacitated. Young people need to decide who they want to make those decisions, whether that’s a parent, spouse or another trusted person in their life.
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Protecting their assets. Young people often don’t realize just how much they have since their assets aren’t large or obvious, but even if they don’t have much now, estate planning is about planning for the future. Young people should establish an estate plan that can grow with them as their assets develop and they earn more over time.
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Guardianship of children or pets. Young people with children need an estate plan to ensure the preferred guardian. And even those who don’t have children may want to designate who will care for their fur babies if they’re unable to.
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Student loan debt. Some federal loans are forgiven when the borrower dies, but private student loans typically are not. Having life insurance with a beneficiary can enable family members to pay off any student loan debt.
With this common protest in mind, financial advisors can explain to younger clients that they don’t have to be wealthy today to have valuable assets worth planning for.
Busy people need to take time for estate planning to protect their family’s future
“I’m busy, and the process just takes too much time” is a common excuse, but busy people still need to plan for the future. Focusing on how busy their lives are now is short-sighted because investing just a few hours of their time now could save their family months or years of frustration later. Planning their estate is considerate of their loved ones because, otherwise, their estate will end up in probate, costing their family time and, potentially, a sizable portion of their assets.
Estate planning takes time, but using the proper online tools can make it less burdensome. A comprehensive estate plan could take less than an hour—and that’s far less time than their family would spend wrangling with the probate process in the long run.
Financial advisors can help make sure their clients understand that they can minimize the time it will take to plan their estate by using companies like Vanilla that cut out unnecessary questions or frustrations. To learn more about how Vanilla helps you deliver a better estate planning experience without the hassle, get in touch.
Budget-conscious people need to recognize the value of estate planning
Some people refuse to make an estate plan because they worry that “it’s too expensive.” While estate planning costs may be a legitimate concern, failing to plan comes with a greater potential expense. Paying a nominal fee now can help save a person’s family and friends from spending thousands of dollars in legal fees and probate expenses in the future.
Also, using high-quality online estate planning documents can streamline the process. That means people need far fewer billable hours with an attorney, making estate planning faster and cheaper.
Financial advisors can also point out the total value of their assets and the 3–7% of the assets they could lose in probate in relation to the expense of creating an estate plan. In the end, they’ll see that estate planning is easily justifiable.
People who are intimidated by estate planning need help easing those concerns
Some people are concerned that the estate planning process will be “too complicated.” But estate planning doesn’t have to be complex, especially with the right solution guiding the way.
Basic estate planning includes helping your clients consideration of the following key questions:
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Healthcare and financial decisions. Who would they like to make financial and healthcare decisions for them if they become incapacitated?
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Trustee appointment. Who would they like to manage their trust assets after they die?
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Distributions. Do they want their beneficiaries to have access to assets at certain ages, or would they like to leave those decisions up to the person managing the trust?
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Gifts. Do they want to make any specific cash gifts? If so, to whom?
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Guardianship. Who do they want to serve as guardian of their children if they are no longer physically able to do so?
A financial advisor can walk worried people through the estate planning process and address any unique circumstances they may have.
Even prepared people need an updated estate plan
Ron and Beth planned their estate years ago after their first son was born. Since then, they’ve had two additional children, bought a larger home, and continue contributing to their retirement accounts. They feel comfortable that they’ve planned for their children’s future, but their oldest son is the only one listed in their estate planning documents, and their trustee is no longer a family friend.
Ron and Beth fall into the all-too-common line of thinking that “I already did my estate plan years ago. I don’t need to update it.”
People need to update their estate plans regularly, the same way they need to change the batteries in their smoke detectors. If your client tells you their original estate plan doesn’t need to be updated, remind them that they should review their plan regularly and discuss any major life milestones you know they’ve reached with them. Major life events include having a child, diagnosis of a significant illness, divorce, moving to a new state, marriage, or a noteworthy change in their assets.
Thanks to Vanilla, keeping your client’s estate documents up-to-date has never been easier.
Vanilla’s proactive estate monitoring and opportunity generation help you keep your client’s estate planning up-to-date based on their existing documents. If your client moves to a new state, Vanilla will notify you in-app to get in touch with your client to update their estate documents accordingly. Not only will Vanilla proactively remind you in-app, but opportunities like this can also be exported as part of an easy-to-understand report that serves as one of the best prospecting tools for financial advisors today. To see an example of this ultimate client deliverable, download a sample report below.
If you want to learn more about Vanilla and how it works, get in touch.
Everyone with assets needs an estate plan
Some people think they don’t need an estate plan because they don’t think they have anything to plan for. They say: “I don’t have a lot of assets, so I don’t need to do estate planning.” While they may not feel like they have a lot of assets, people need to remember that real estate, cars, jewelry, family heirlooms, and pets all have value, especially to them. They want to make sure these assets are distributed to the people they want to have them.
People also should consider digital assets when planning their estate. Digital assets—like social media accounts, credit card rewards, frequent flyer points, virtual currencies, and income-generating websites—are relatively new. A recent study found that the average American has about $55,000 in digital assets.
Even people who don’t think they have a lot will be surprised by how many things they have and how strongly they feel about their distribution. After all, they have enough assets to have a financial advisor, which means they have assets worth value and care about what happens to those.
People who want to lessen their family’s burden need an estate plan
Some people don’t think they should plan for their estate because, when that’s needed, they won’t be around to care. They say: “It’s too much of a hassle to plan my estate. I’ll be dead anyway. Why does it matter?”
The response to this common estate planning excuse is easy because it will matter to their family. An estate plan will matter to their family when they’re trying to grieve their loved one. It’ll also matter to them when they’re bogged down with the expense of planning a funeral, dealing with creditors, and trying to determine what happens next with the deceased’s estate.
Failure to plan can also result in a person being put into assisted living or another medical facility against their wishes, which is something that likely would matter a lot to them.
Financial advisors should make sure their clients understand that, even when they’re gone, their family will need the financial security they can help provide.
Who needs estate planning? Everyone.
Everyone needs estate planning. It’s not fun to discuss, but it’s responsible for everyone to plan and document what should happen if they become ill and cannot make decisions for themselves or when they die.
People make a lot of excuses not to plan their estates because they’re afraid. Ultimately, failure to plan puts a greater burden on their family and friends and results in the chaotic distribution of whatever assets they have. Financial advisors can help secure their client’s assets for the future by addressing the common reasons people give for not planning their estates and encouraging them to plan. If you want an estate planning solution that helps you deliver estate planning to more clients or prospects alike, get in touch.
Change the way you serve your clients
This article is for educational purposes only and should not be considered legal advice. If you feel that the information in this article is pertinent to your situation, you may wish to consult a qualified attorney for advice tailored to your circumstances.
Published: Sep 25, 2020
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