For several years, and even after the birth of our firstborn, my husband and I talked about getting around to writing our wills, but never took any action. We found that we were definitely not in the minority; many, if not most, of our friends hadn’t taken steps to do any kind of will writing. Finally, after Anthony Carducci, an estate planning lawyer, came to speak to my Mothers of Preschoolers (MOPS) group, and it was just the kick in the pants I needed to make an appointment. Before we started the process, I had expectations that it would be completely dull and depressing. Thankfully, it turned out to be relatively straightforward and easy, and now I am the one encouraging my friends to take the necessary steps to protect their assets in the future!
I reached back out to Anthony Carducci with some common questions and concerns people have before taking the (very important and necessary!) plunge to will and estate planning. I hope his very candid responses encourage you to get started in securing your future for your children
1) What are some common misconceptions/mistakes you encounter when parents begin estate planning for the first time?
Myth #1: I am not wealthy enough to need a will.
This is the biggest myth that exists in all of estate planning. In fact, nearly 70% of all adults have not done any estate planning! A will is the place where you designate the people that you would trust to be the guardians of your children. Without this designation, the court would have to appoint someone.
What happens to your assets? If you do not designate who will inherit your assets, then the judge will make that decision based upon state law. Again, do you want a judge deciding who will receive not only your assets, but keepsakes such as your family’s wedding dress, family photos and/or heirlooms? If you do not create a will, the government could actually inherit all of your assets, if you do not have any living children, relatives, etc….
Myth #2: A will is the only estate planning that I need.
If you write a will, but do not put other documents in place, you run the risk of having no one to handle your affairs if you became incapacitated due to disease, illness or tragic accident. You also run the risk of not having anyone available to make important medical decisions for you.
To avoid this situation, you should consult an attorney to create an estate plan that addresses your existing assets and your current investments and insurance options. This plan should contain a will, a trust, a health care power of attorney or advance medical directive, and a power of attorney that covers important areas outside of health care and possibly a few other documents.
Myth #3: A will is the best way to leave assets to children and heirs.
Actually, a will is not the best way to leave assets to your children and heirs. Unfortunately, even if you write a will, your estate will still go through the probate process. This process, even in the best of situations, can take 6 months. Some cases can exceed 18 months. You do not want your children and heirs to be forced to wait 6-18 months to receive what you have left for them. A better option is to set up a trust because through this vehicle you can pass assets to your children or heirs without going through the probate process.
Myth #4: A trust only benefits people like Bill Gates and Warren Buffett.
A trust has many benefits that are appropriate for most people. A trust maintains your financial privacy because it is not public. Any assets placed in a trust will not go through the lengthy probate process. This means that courts stay out of your trust’s business unless they are being managed improperly. When one passes away, assets in a trust can be distributed to the heirs and beneficiaries extremely quickly. A trust can also be used to provide for charity, for children with special needs and many other purposes. The bottom line is that if you have more than $50,000 in assets, a trust could be appropriate for you.
2) If I don’t have a will and I pass away, won’t my family decide guardianship of my child(ren)?
Ultimately, a judge decides who will serve as the guardian of your children if you pass away while they are minors. The judge will use the “best interest of the child” standard to make this determination. However, other friends, family and even people you do not know could petition the court to serve as guardians. This could lead to significant family discord. If there are people whose values differ from those you want instilled in your kids, you need to exclude those people from serving as guardians of your kids in your will.
3) What are the benefits to having a will written by a lawyer instead of using an internet service (such as Legal Zoom)?
A friend of mine used to say the documents are free, but the legal advice is why you pay an attorney. A software system is only as good as its design. The software does not explain your options nor the implications/effects of those decisions. A good estate planning attorney should be a trusted adviser that can guide you, answer your questions and help you to make informed and empowered decisions that are best for your family.
4) Do the laws vary state to state? What happens if I write my will while living in DC and then move to across the country?
Your estate plan which you create in one state is valid in another state if you move. However, different states have very different estate tax and probate rules. You should not delay putting a plan in place simply because you might move to another state. However, you should consider having an attorney licensed in your new state review the plan in order to determine if the plan complies with your new state’s laws.
5) How do we make things easiest for our kids and their guardians?
You can make things easiest for your kids and guardians by removing all of the guesswork ahead of time. You should name the guardians for your kids; name your executor(s), power of attorney, medical agents and trustees of your trust; set the beneficiaries or inheritors of your assets ahead of time; and create a plan to avoid probate. If you do these things, no one will have to guess what you wanted.
If you are interested in discussing these issues or others, Anthony Carducci invites you to contact his office to schedule your no obligation, complimentary 60-minute consultation to discuss planning matters. During this meeting, Anthony will review your current situation to learn how your planning–or lack of–would fare today. He will alert you to those things that will keep plans from working as intended. You will have a chance to ask questions to determine what is best for your family. The Law offices offer weekday appointments from 10am – 4pm and additional hours may be arranged if needed. You may reach him at [email protected] or by phone at 240-235-5070.