People plan for many things. They choose to enroll in 401K?s with their employment income. They may even start external retirement accounts. They create savings accounts with emergency funds, just in case. They pay monthly premiums on health insurance. They pay annual fees on auto insurance policies. People like to be protected. Why then, do over half (51%) of Americans aged 55 to 64 not have wills? People tend to not want to think about their own demise. However, this is the ultimate risk. Leaving your family behind with your debts and not properly dividing your incomes can cause a lot of family problems.
An advanced directive and a living will are actually very simply to set up. They do not require much time and they are not very expensive. The biggest deter to setting one up is simply that people never get around to it. Creating an advance directive or living will does not increase your chances of something happening to you. It simply protects your family members, in the event that it does.
An estate planning attorney is a great resource for creating an advance directive. There are a lot of stipulations and unique circumstances when it comes to advance directives. There are things that can make the living will more complicated, such as business ownership, shared interests with living people, homes or cars with mortgages or loans on them, and complicated financial situations. For example, if you have assets in the six figures or higher, you probably ought to have a trust in addition to a will, to help minimize estate taxes and avoid probate.
The ultimate goal is to provide your family with what they need and to divide all of your belongings to those you decide. Many families have ended in disagreements and arguments over who should get what. A living will or advance directive is really the only way to ensure that everyone gets what you feel is deserved. You can also rest easy knowing that everyone will be taken care of, even if something should happen to you.
As mentioned, wills and advanced directives can also help with difficult or complicated financial situations. For example, say that you have recently suffered a financial difficulty. You lost your job or incurred a large expense that put you into debt. Until then, you had always planned on leaving your house to your child, but now, you do not want them to incur the debt. Your house is underwater because of the additional mortgage on it, and you do not want your child to have to be responsible for it.
Businesses can also be especially tricky. Many business owners may want to leave their businesses to their children. However, what if the child does not want it? The child may be forced to sell or upload the business, if they are not informed of what to do. The living will is the best way to carry out your wishes, without having to have the difficult conversation. A living will can also set specific stipulations, such as requiring a child to be a specific age before receiving money, or having to take specific certifications and educational lessons before obtaining a business.
Another example is of medical debt or other costs that are incurred. Many living wills and advanced directives will also include a portion of the money to pay for any incurred debts. Many elder law attorneys are well educated in these specific financial difficulties and can provide the necessary legal help to set up a living will. A business lawyer may also be helpful in business related wills.
Americans are planners. They take out multiple insurance policies and put away money for retirement, yet they never actually plan what will happen to their money after they are gone. Leaving family in the dark can complicate the dynamics and can leave people guessing what you would have wanted. It can also leave people in debt and struggling to pay for your financial problems. A living will is the best way to protect those you care about and to ensure that everything you own goes where you want it to.