To those who are retired, have plenty of money and are entering their golden years, the importance of an estate plan may be an afterthought. After all, they probably have managed their money and assets well up to this point, and may feel that creating an estate plan invites morbid thoughts of their own mortality.
The same could be said for young people who are just entering adulthood. They may feel as if they are indestructible, and are destined to live into their eighties. Because of this, they may believe that they are too young for estate planning and have plenty of time to do so later in life.
Both notions are problematic given that no one can predict the future with reasonable certainty. Also, both may be overlooking important, and troubling implications of passing away without a will, trust, power of attorney or transfer on death deed.
For instance, you may not realize that without a will, your assets may not be distributed according to your wishes, and they may proceed through a lengthy and costly probate process. Additionally, California’s probate code, and not you, may end up deciding who is entitled to your assets. This could create further angst and conflict if you have family members who do not get along or believe that they are entitled to more than others in the family.
Further, the tax burdens that can be potentially created without a will should be of particular concern. Not only may federal taxes affect the state, but other costs and fees may compromise the estate.
Source: WSJ.com “When a client does not have an estate plan,” Austin Kilham, April 18