A common misconception is that estate planning applies only to those with many assets. In some states, many people may not even reach the estate value limit in which they would need to file an estate.
According to AARP and a survey by caring.com in which they asked more than 1,000 people if they have prepared those documents, 64 percent of Americans age 37 to 52 don’t have a will.
Michael Leichner, financial adviser at Leichner Financial Group in Pepper Pike, and David Woodburn, trusts and estates practice group leader at Buckingham, Doolittle and Burroughs in Akron, said even if people think they don’t have many assets to include in an estate, they have at least one item they want to designate to another.
“Even if it’s not millions of dollars that are going to pass, there are a lot of things that people want to have plans for,” Woodburn said. “You may not have (a) huge (amount of) dollars at stake, but you want to plan for it. When you don’t have an estate plan in place, you’re leaving your estate and assets to the laws in Ohio. Especially with blended families, without an estate plan in place, you run the risk of assets passing to the wrong individuals.”
Leichner said a complicated estate plan isn’t necessary for those with few assets. These individuals, he said, still should have a will, a durable medical power of attorney and a power of attorney.
“It’s expensive to do estate planning,” he said. “When you’re talking about planning for people who don’t have a lot, a will and a power of attorney would probably run about $400 to $600, depending on the attorney.”
He agreed with Woodburn about making sure a person’s assets don’t end up in court because the process could be costly and could unnecessarily extend the entire timeline.
“When someone dies, unless you have it all spelled out, it’ll end up in the courts,” Leichner said. “The court is going to probably charge 2 (percent) to 5 percent to handle the estate. Everyone should have a will at the very least.”
Woodburn noted young families should consider doing some estate planning, especially if they are concerned about who would take care of their children if something were to happen to them.
“(Young families) can designate who will take care of those children,” he said. “Having a will in place will express those desires on who is going to care for the kids. For many individuals, what happens to their children is one of the most important things.”
Woodburn and Leichner said those looking to estate planning should see if they have the simple documents in place, such as a will, power of attorney and a trust, if needed. Estate owners also should double-check to ensure beneficiaries are up to date.
“I think the first step (to planning) is to get your assets organized and create a balance sheet for those assets,” Woodburn said. “It’s then a matter of sitting down with a lawyer and then working through the mechanics to make sure the assets pass where you want them to go and then aren’t subject to challenge later.”
Leichner said, “Estate planning can get very expensive and for the average person, that might not be feasible. If they want to do an estate plan, they should go to an estate attorney. The average person, someone just starting out, even if you’re not married, you have some assets. You need to lay out what you want to happen at the very least.”