Some clients ask - Do I really have to do estate planning?

VIDEO TRANSCRIPT: Alright so let’s move along.  A lot of clients ask me look Rob do I really even have to bother with this?  Why should I even bother?  And I tell folks look you don’t have to do anything.  You don’t have to go the dentist, you don’t have to go to the doctor, you don’t have to brush your teeth, you can do whatever you want.  You don’t have to do estate planning.  

However if you want to control who receives your assets after you pass away and if you want to reduce legal fees and reduce potential taxes, you might to consider estate planning.  Also if you’re incapacitated, something happens to you, you’re in a coma, you have an aneurism, you get Alzheimer’s disease, dementia, anything a car accident, you can control your assets even if that happens.  You will have also control over medical decisions.  You’re basically trying to figure out, you know, if something happens to me whether it’s incapacity or death, how can I make sure that everything is protected?  

Some people say Rob I don’t have enough money to do estate planning what are you talking about and again this kind of harkens back to the initial issue that I talk about but I always tell people the following:  the less you have, the more you have to lose.  That’s important.  Think about it.  The less you have, the more you have to lose. 

So if you’re a millionaire and you lose one of your millions you’re probably going to be okay, but if you are like most people with several thousand dollars in the bank or maybe hundreds of thousands of dollars in the bank and maybe some real estate basically the question is okay if you lose a large portion of that isn’t that going to be a pinch to your family?  So yeah very wealthy people they can afford to lose something but most people can’t afford to lose that.  Why loose it if you can protect it? 

There are also reasons to do estate planning that have nothing to do with money and it’s more to do with, you know, intangible things, or the issues that are a little bit different from just, you know, who gets what.  One of the examples that I use to illustrate this is called the irresponsible ex-wife or the irresponsible ex-husband.  I had a client one time who came to me and he had just gotten a divorce and one of the reasons he got a divorce was because his wife couldn’t handle money. 

So he comes to me and he goes Rob, you know, he says do I really have to do this?  I told him look Tim if you do nothing at all and you remain unmarried and you die everything will go to your daughter and he goes perfect that’s exactly what I want.  I said hold on a second, don’t you have a young daughter?  How old is she?  And he says well she’s 8-years-old.  I said Tim you realize that your 8-year-old can’t inherit real estate from you?  You know, the insurance company is not going to write a check to an 8-year-old daughter.  I said what you need to do is you need to protect yourself.  I said you know the insurance company won’t write a check to your daughter but they’ll write a check to your daughter’s guardian.  I said who’s your daughter’s guardian?  And he says oh my goodness, it’s my ex-wife.  I said so the insurance company is going to write a check to your ex-wife, is that what you have planned?  He says oh gosh I don’t really want it to work out that way. 

So he created an estate plan that protected his estate from his ex-wife and made sure that everything ultimately went to his daughter.  So you’ll see that has very little to do with, you know, reducing legal fees and taxes, there are other reasons to create an estate plan.  So let’s move along here there’s another point on this particular slide.  You want to give your team the legal tools that they need.  You want to give your team the legal tools that they need.  People can’t just act on your behalf and help you out just because they’re related to you.  They actually have to have the legal documents that empower them to do so. 

So one of the analogies that I often use with clients is I say look think of it like a big tool box, okay?  So if you have a tool box in your garage and it has got you know a hammer and some nails and it has got the screwdriver, a wrench, depending on the problem that you have you reach into the tool box and you grab whatever you need to fix the problem.  Well it’s the same thing with an estate plan.  An estate plan is a legal tool box and it looks a little fancier, it’s in this nice binder and everything, but inside is the same tools except this time you’re going to have things like a will, a living trust, powers of attorney, health care directives, marital property agreements, assignments of interests, I mean a variety of different tools that will be in this tool box that people that you trust can reach in there and grab whatever they need to address the situation.