[Despite the ominous title, this article is not about despair. We get enough of that from the news every day.]
Instead, this is a discussion about what can go wrong if you decide to put off your estate plan, or ignore it altogether. By relying on hope that "the legal system" will somehow make things turn out right when the time comes. By not weighing the consequences that might bite back if you leave your estate to the winds of fate, luck and wishful thinking.
Granted, there are times in life when embracing hope is an uplifting and comforting thing. But framing your estate plan around the hope that it will take care of itself is not one of those times.
Let's look at a few ways things can go sideways if you ignore having a well-crafted estate plan.
Not having a Will.
While there are intestate succession laws to help distribute assets of a decedent who did not leave a Will, those laws are rather blunt tools, only intended as a sort of "safety net" to help keep assets in one's family to the extent possible. As such, it cannot anticipate every situation. Your assets may end up being distributed to family members you hadn't planned to give to, or in amounts you might not have agreed with.
Not having a Will also means that the probate court will appoint a personal representative to manage your estate assets. That person might be someone you wouldn't want serving in the role. It might be someone you don't even know. And you won't be there to make a better choice.
By having a Will, you can direct your assets to the people you want to receive them, in the amounts you choose to give. You can give assets to step-children, distant relatives, people outside your family, or to charities, choices that intestate succession doesn't accommodate. With a Will you can select personal representatives whom you trust to oversee your estate and carry out your wishes. You can also nominate guardians and conservators to act for the benefit of minor children.
Not having a Durable Power of Attorney.
If you become incapacitated, who takes care of your day-to-day financial needs? Who pays the bills, runs to the bank, manages your small business, deals with insurance companies and government agencies? Without a Durable Power of Attorney, you have no trusted agent assigned to take care of your financial affairs when you are unable to make those decisions for yourself. It may be necessary for a court to appoint a conservator to act on your behalf.
Not having a Health Care Directive.
What happens if you are unable to make health care decisions on your own? What medical treatment do you want and not want to receive? Where do you want to be treated? Who steps in to ensure that your values and wishes are being respected? If you don't have a Health Care Directive, the doctors have no guidance as to your preferred course of treatment. You won't have an agent in your corner to advocate for your best health care interests.
Not updating beneficiary designations on your POD accounts.
Have you looked over the beneficiaries named on your payable on death accounts, like life insurance, investments, and retirement accounts? It is important to do a review of those from time to time. Has your marital status changed? Is there a family member who is going through difficulties in life, like money problems or addiction issues? Are there new children or grandchildren? Have you lost a loved one recently? These are all events that should inspire you to revisit your accounts to make sure the named beneficiaries are up to date and those nominations reflect your current wishes.
And by the way, if you have a Will, any of the above events are good cause for you to revisit that document, as well.
Hope is not a strategy.
Relying on it to save the day in regards to protecting your estate is folly. But looking at the issue in a positive light, you can be proactive and start making plans for the future of your family. It's never too late to begin. A qualified estate planning attorney can help you get started.