What do Sonny Bono, a Supreme Court Chief Justice, an Olympic athlete, and actor Heath Ledger have in common? It sounds like it could be the opener to a bad joke, but what links these people together is no laughing matter.
As Forbes.com reported, more than 50% of Americans do not have any of the most basic estate planning documents. (For Newsletter only: Click here to read more about the link between the famous people listed above).
Sonny Bono had no will. Supreme Court Chief Justice Warren Earl Burger wrote his own will and neglected to address several issues that cost his family more than $450,000 in taxes. When Olympic athlete Florence Griffith Joyner died at the young age of 38, her husband claimed he couldn’t locate her will, leading to a family feud over her estate. And although actor Heath Ledger had prepared a will years earlier, he didn’t update it when his daughter was born. His will left everything to his parents and sister and neglected to provide for significant other, actress Michelle Williams, and their daughter, Matilda Rose. Apparently his family eventually agreed to provide for Matilda Rose, but not without some family disharmony.
One of the biggest mistakes anyone can make is failing to create (or update) an estate plan, regardless of one’s age. Although no one enjoys planning for disability or death, creating a well-conceived estate plan is one of the most important ways you can protect yourself and your loved ones.
Still not convinced? Consider how the following life-altering events could impact you and/or your loved ones:
1. You are taking your children to school when you get into a terrible car accident. You are left hospitalized and unconscious and you have made no indication of a preferred guardian through proper estate planning. Do you want a judge who does not know you or your family making that decision for you because you failed to do so?
2. You live alone, but for that loving and endearing pet who keeps you company and has become your family. You become disabled on the job at work one day, or suffer from a stroke that has lasting consequences. Have you made arrangements for how your pet will be cared for if you are unable to do so?
3. You work all your life to build a nest egg and provide for your loved ones. Then, one day you suffer a debilitating injury that leaves you physically and/or cognitively disabled to the extent you must move to a long term care facility. Without substantial long term care insurance, you are essentially “self-insured”, meaning you will have to privately pay the facility with your life savings.
4. You manage to maintain your nest egg so that your loved ones receive a substantial inheritance when you die. However, one of your loved ones is suffering from financial woes and creditors ultimately inherit all the inheritance you left behind. Or, even worse, one of your loved ones is disabled and loses all government benefits (including medical coverage) until all the inheritance is spent down on cost of care.
These are just some of the important situations that may wreak havoc upon your life, the lives of your loved ones, as well as the security of your financial and legal future. Just because you think you have “a simple estate,” don’t allow that assumption to prevent you from obtaining necessary guidance and advice from a qualified legal advisor.