Polls consistently show that roughly half of American adults do not have estate planning documents. For young families, this number is even greater. Why do more young families not have Wills or Durable Powers of Attorneys (DPOA) appointing surrogate decision makers? While the young are far from old age and do not see sickness or death on the horizon, careful planning is important because the risk to your children and loved ones is significantly greater if you pass away without proper planning.
There are many factors that inhibit young parents from preparing their Wills and DPOAs. To name a few: (a) exhaustion from raising children and a never ending parade of pick up and drop offs to activities and school; (b) fear that hiring a lawyer will be too costly; (c) uncertainty about whom to appoint as executor, guardian or trustee; and (d) fear of discussing death.
(a) Exhaustion: While it may seem counter intuitive, a great time to have your planning documents prepared or updated is after the birth of a child. Habits are most easily changed when you have a change in routine. (http://www.npr.org/2012/03/05/147192599/habits-how-they-form-and-how-to-break-them) Introducing a new member to the family is a good time to reevaluate your monthly finances, financial goals, life insurance and estate planning documents. Also counter intuitive, a good time to call your estate planning attorney is the day after you return from a vacation. The two most important reasons for young parents to have their estate planning documents prepared are to protect against your children receiving assets outright at 18 and to nominate guardians.
(b) Too Costly: Most estate planning attorneys bill hourly, while a handful offer flat fee packages. For hourly billing , you should be able to request a fairly accurate estimate of cost. It can be unsettling not knowing the exact cost. However, attorneys that bill hourly count all the time spent meeting with the client and working on document preparation. That means the less time they spend, the lower your bill will be. If you are able to come to your meeting prepared, knowing what you want in your estate plan and having already selected your executors, guardians, trustees and attorneys-in-fact, you will keep your bill down. If you are cost sensitive, as many young families are, when visiting your lawyer it is best to keep your bequests simple and revisions to a minimum.
(c) Uncertainty: The three most common roadblocks to picking an estate executor, guardian and trustee are (1) fear that someone will feel left out. The job of executor is not a gift, it is hard work that is time consuming and often thankless. You are best to pick someone up to the task. (2) Not knowing anyone who is financially savvy; a way around this is to appoint a professional fiduciary. While a professional does charge a fee, there are strategies to make their involvement as cost effective as possible; (3) Not knowing who to pick as a backup guardian. This is a real problem for our highly educated and mobile work force. Particularly those involved in tech who move from all over the country to choice jobs in techie cities like Seattle. Their family members often live far away, but their children have become enmeshed in the local community. This is not an easy question to answer, but proper estate planning is critical to allow provisions for guardians to relocate so that minor children can be kept in their current locale.
(d) Fear: Talking about death is always a difficult and uncomfortable topic. But we must push aside our fears and discomfort and have the hard conversations to protect those we care about most.