this. Youíve been invited to a meeting; when you get there you
realize itís the first meeting after your own death. You canít say
anything. You can only observe. What do you see? Is your family
celebrating your life or are they sitting there helpless not knowing
what to do or whom to trust." This is how Karen Ellenbecker,
president of the Ellenbecker Investment Group, illustrates the
importance of estate planning to her clients.
clients that are actually afraid that if they prepare an estate plan,
then theyíll die ó like itís some kind of jinx. They donít
want to face the fact that they will die no matter what they do. If
they donít have a plan in place the government does, and it probably
wonít be the same," she says.
An estate plan
is a simple way to ensure the plans you make for your family and
finances are met after you die, Ellenbecker says. Generally, an estate
plan includes a will, an assignment of power of attorney, a living
will or health-care proxy, also known as a medical power of attorney,
and any trusts for the financial assets of minor children or disabled
Evelyn L. Brown, an attorney at DeWitt Ross & Stevens, the
most common misconception about estate planning is that itís only
for the rich. "A personís estate includes more than their bank
and investment accounts. The question an individual should ask himself
or herself is: Do I have property I own (including insurance policies
on my life) that I wish to give to certain beneficiaries at my death?
If the answer is yes, then that individual should have a plan in place
for his or her estate."
Estate plans are
also not as complicated and expensive as most people believe.
Ellenbecker says it normally takes just two meetings, one to draft the
documents and another to witness them. The whole process takes about
30 days. Taking care of the basics like drawing up a simple will and
assigning financial and health-care powers of attorney can be prepared
by a qualified attorney for around $1,200. Adding a trust can increase
the cost to $2,000 to $3,000. As the situation becomes more complex,
Garren Agle of Cream City Investments, most people donít need
anything complex. "It should include a will, advance health-care
directives and powers of attorney. Normally, part of the plan should
deal with end of life health-care wishes. That way there is a document
that hospital and doctors will accept. It takes the burden of making
those decisions off of family members in very difficult times."
planning, estate planning can get very personal as family dynamics
come into play. "I often say that estate planning is half math
and half family counseling," says Mark Beck, director of wealth
management services at Annex Wealth Management. A lot of people put it
off because they donít want to face the decisions that have to be
made. Who is left what, to whom do I entrust guardianship of my
children, who has control over my health care if I am incapacitated,
who has control of any trust funds. "A good estate plan involves
a lot of hard conversations. For example, some of my clients have
estranged children or donít trust their childís spouse. This is
when they actually have to put that down on paper, and thatís never
easy," Ellenbecker says.
Friedman, one of Brownís clients, set up a transfer on death deed
for her grandmotherís home. This deed provides for an automatic
title transfer upon death without having to involve the courts, and
thus avoids costs and unnecessary delays and bureaucratic red tape.
"Dealing with the death of a loved one is difficult enough ó
having oneís affairs in order on the front end really can save a
family emotional and financial stress," she says.
life change, so it is important to review the plan periodically.
Estate plans should be revisited every few years, or immediately
following a major life event like a marriage or divorce, death or
birth in the family, after receiving an inheritance or a move to a
different state. No matter what the case, the experts agree, donít
put it off. "You should start thinking about it at marriage, but
definitely once child No. 1 is born. Itís time to have an estate
plan," Agle says.