When I was twelve years old, my father sat my older brother and me down for a conversation about his Last Will & Testament. He explained that under his will if something happened to him and my mother, and all other relatives of course, we would be sent to a Christian orphanage in Tupelo, Mississippi. Although my father assured me this was done only to plan for every foreseeable contingency, my twelve year-old brain started racing through all of the most important questions: Where is Tupelo? Do they have a good cafeteria? Does my brother really have to come?
Interestingly enough, I had a second conversation with my father about a month ago in which he jokingly informed me that if I did not update his will (pro bono of course) that one day I would end up at an orphanage in Mississippi. This time my mind raced to completely different questions: Does Dad's will really need to be updated? Should I at least call and ask about the cafeteria? Well, not completely different questions.
While reviewing my father's will I found that although many provisions of his will no longer applied, especially since my brother and I have reached adulthood (whew!), many provisions did apply and, more importantly, still met my father's wishes. My father's will was executed in the 1980's and still meets his desires with full force and effect today.
Many of my clients express to me in our initial conferences a fear that if something changes in their lives, they will not have the finances to update their estate plan. Thus, they hesitate in completing one. Although it is wise to visit your estate planning attorney every few years for review, it is not necessary to update your estate plan with every life change. Every good estate planning attorney prepares estate plan documents to apply according to many life contingencies. Therefore, even though there is a cost to preparing an estate plan, many times it is a one-time cost. More importantly, the benefits far outweigh the cost.
Estate planning allows you to decide and declare who will receive your assets upon death. You can leave your assets to your children, your other loved ones, or even to your favorite charity, such as Porter County Aging & Community Services ("PCACS"). In addition, estate planning allows you to make choices that could help reduce taxes on the final distribution of your assets. For example, a gift made through your estate plan to PCACS or other charity would qualify as a non-taxable transfer for purposes of both the Indiana Inheritance and the Federal Estate Tax. In addition, certain trust arrangements help to reduce tax on final transfers as well. Although the possible arrangements are virtually endless, the point is that estate planning allows you to distribute your assets to whom you choose while maximizing the amount you distribute through planning.
Another benefit of estate planning is that it allows you to designate who will care for any minor children you leave behind and who will be responsible for managing your probate estate and any trust that might be set up for your loved ones. The most important decision of an estate plan is choosing who will be responsible to execute your wishes. Contrarily, if you do not execute an estate plan then you forfeit your right to make that decision. Having an estate plan provides comfort that people you trust are designated to handle your final affairs and assets. Appointing a capable person to handle your estate will make the process much easier on your loved ones as well. For those who truly care for their family, friends, and communities, estate planning is more a requirement than an option.
In sum, the benefits of estate planning are many and are too advantageous to your loved ones to ignore. In addition, changes in your life situation many times will not change the effectiveness of your estate plan making the cost a virtual one-time cost. My father had an estate plan prepared when he had two small children, much less money, and less gray hair, but despite all the changes since then, his estate plan is still valid, useful, and well worth the cost. So, take a lesson from my father and call an estate planning attorney. Also, if you decide to designate an orphanage as a final option for your children, I hear there is one in Mississippi with a great cafeteria!
