As estate planning and probate attorneys, we often see evidence of a lack of financial literacy. While the bulk of financial literacy programs focus on amassing and growing wealth, there is a distinct lack of focus on how best to pass that wealth to the next generation. According to LexisNexis, 55% of American adults do not have a Will or Living Trust to direct their estate to their chosen beneficiaries at death.
We often find ourselves assisting the friends and family of those who died without a Will or Living Trust. Although many people prefer to bequeath their estate to friends or life partners who are not directly related to them, if they pass away without setting their intentions in writing, intestacy law will govern and those most closely blood related to the decedent will benefit. Sadly, this thwarts the wishes and intentions of the deceased.
As a society, we tend to shy away from discussing issues related to death with our friends and family. This hesitation leads to significant stress and loss of wealth as survivors are forced to deal with the tedious court process of probate and pay significant fees, in most cases.
For example, the probate process in the state of California can take a total of 12 – 24 months from start to finish. The probate fees for an estate valued at one million dollars in California (based on fair market value and excluding debts) are in the range of $50,000. Given the fact that for many Californians, the worth of their home represents a sizable portion of their total worth, properties must often be sold due to lack of liquidity to meet expenses.
It’s not enough to simply amass assets. To properly provide for your beneficiaries, you must pass your wealth efficiently. This means having a comprehensive estate plan that addresses not just your assets and beneficiaries but your values as well. Don’t miss out on this important piece of your financial plan. Get your estate plan in place today!