About 55% of American adults lack an
estate plan. That number increases to 64% of farmers and agribusiness owners.
That’s a concerning number for J.C. Hobbs, associate Extension specialist at Oklahoma State University. He explained in a recent webinar hosted by the U.S. Department of Agriculture that being without a plan means relying on others to come up with a plan. Not many want that responsibility.
Hobbs gave five reasons not to have an estate plan:
“The legislature can do a much better job allocating your property than you can.”
He explained that each state has its own rules for intestate succession. In other words, if you don't have a will or a trust, the Legislature has a way in which they would have the property transfer, and “it may not be the way you would like to have it done,” he said.
“The government can use your estate tax money. Charities and your family don't need it.”
He explained how a good estate plan can minimize the estate tax, minimize attorney fees, court costs and leave more money to your family or to charities as you wish to have it.
If you don’t pick someone whether an administrator or executor, the court will appoint such a person.
“And believe it or not, can they do a better job than you? Not really,” he said. “They don't know your specific background. They don't know what you're really wanting. They just put somebody in place to handle the job, and it may be somebody that you don't want to have handle the job.”
If you have minor children, it’s the court’s decision who will care for those minors.
You may have a much better option than what they would pick. So, if you've got minor children, the estate plan is a must.
“Your grieving loved ones do not need any help looking after your affairs.”
You’re going to leave your family or someone in your family to sell the estate and take care of everything in terms of transferring the estate, property and taking care of any bills. Your heirs won’t have a choice but to make decisions that they are unsure if you would approve of.
Why planning matters
Hobbs gave three significant reasons to plan for the future that could come at any time. He recalled a recent example where, had there not been careful note-taking by a caretaker, the estate plans would have been lost.
Intestacy may determine property distribution, executor or administrator selection, and care of minor children.
Written instructions can reduce confusion, conflict, settlement costs, and unintended transfers.
Estate plans should be reviewed after births, deaths, marriages, divorces, law changes, and major property changes.
He made clear that planners should talk to an attorney or accountant for specific advice on your situation because each situation is different.
"You can seek the advice or thoughts of your heirs, your children, etc.," Hobbs said. "But remember, the final choice is yours. That is the important thing to keep in mind."