There are many unknowns when planning an estate, but you can’t let the uncertainties get in the way of creating any kind of plan. Having an imperfect plan is usually better than having no plan at all.
When planning an estate you want to be able to consider all the angles, but there are inevitably a number of “known unknowns” that can make planning difficult. These include:
- How long you will live
- How much money you will have left over, which can depend on longevity and potential need for care
- Your children’s health
- Your children’s financial stability, now and perhaps many decades into the future
There are also value judgments to make. Should you treat all children equally, or should their financial situations be taken into account? In any family, some siblings can be wildly successful financially, while others struggle. Some children may have supported you in your old age and others totally ignored you. (A word to the wise: Unless you have had a discussion with your children, treat them equally in your estate plan. You can provide differential support during your life, but unequal distributions at death can create great difficulties if they come as a surprise.) Should you create trusts that protect assets for your children and grandchildren, or simply provide that the funds be distributed outright at your death for them to use as they choose? Whom should you appoint in various roles—as agent under powers of attorney, as health care proxies, as trustees, as personal representatives?
Not having definitive answers to these questions can make it difficult to finalize a plan. However, before you get overwhelmed and give up on estate planning altogether, you need to consider the following:
- Any plan is much better than no plan
- We can’t totally predict the future, but just have to do the best we can based on what we know today
- No plan is irrevocable; you can make changes as circumstances change or if you rethink what you want to do
- After age 60 or so, it’s important to review your plan every five years in any case, since circumstances and laws change
The best way to approach estate planning is to think through all the questions and then create the best plan based on current circumstances. Your estate planning attorney can help you talk through all the options. To contact an estate planning attorney at Tesfaye Law, click here.
- Be Careful Not to Name Minors as Your Beneficiaries - August 3, 2021
- How an Irrevocable Life Insurance Trust Can Be Used to Avoid or Reduce the Estate Tax - July 13, 2021
- What You Can’t Do With a Will - June 1, 2021