Why don't more people go through the process of assembling an estate plan and keeping it up to date? This question is perhaps one for the ages. The reasons why a person or a couple should have a plan have been pretty well documented and spelled out in a lot of forums, including this blog. But still there are a lot more people without estate plans than there are with them.
The excuses that estate planning professionals say they often hear as to why no plan is in place are not complicated. Among the most common are:
- That's just for rich people.
- I'm too young to do that.
- Government already takes care of this, doesn't it?
- My spouse and I hold all property jointly, so no will is needed.
- Such planning is too complicated and costs too much.
One of the scariest replies to the question about estate planning status is this one: Oh we did that 30 years ago when we got married.
Obviously, in this day and age of no pensions and dependence on Individual Retirement Accounts a lot of those statements don't stand up to scrutiny. If you have anything of value and you want someone specific to have after you're gone because you know he or she will value it just as much, you should have a plan in writing for the transfer.
If you have a vision of amassing even a small cash amount to be handed on to someone later, you might want to think about establishing a living trust. One reason for taking such a step in Pennsylvania is that in the absence of a plan, the government will step in to manage the distribution of the estate. And that probate process will be time consuming and likely be costly to your beneficiaries.
A living trust circumvents probate by directly reassigning ownership of the asset to the intended after the creator's death. Creating a trust may also provide a greater level of protection of the asset because, unlike a will, details of a trust don't become part of public record. That may serve to insulate the asset from creditors who might seek to claim it to cover a debt owed by the decedent.