How Emotions Can Affect Your Estate Planning
There is little disagreement that effective decision-making is one of the most important skills we must hone to achieve success in almost every aspect of our lives. People tend to believe that their feelings don’t bias their “logical” decisions but studies have shown that emotions are critical to decision making. Estate planning is no different. No matter how you look at it, when people are involved, emotions are always going to be part of the equation. Let’s take a look at how emotions can affect your goals in estate planning.
Estate planning can be a morbid topic for many. One of the most common emotions in estate planning is fear. Speaking about death or incapacitation and what’s going to happen once you’re gone is an unpleasant topic that people tend to avoid. Most would agree that estate planning is important, yet all too often many fail to act. Case in point, 55% of Americans don’t have a last will. Being uncomfortable or afraid of the subject can lead to two of the biggest mistakes one can make when it comes to estate planning: avoiding it all together, or not reviewing your plan often enough to account for life events that can have an effect on your estate.
While estate planning can be a stressful and emotionally-charged topic, it can also be a lengthy and overwhelming process for many. Establishing a detailed plan can take anywhere from six months to two years. The lesson being that it’s never too soon to get started. Not all estate plans for business owners or high net worth individuals are the same, and each should be customized to fit your ever-evolving individual circumstances and needs. The key is to not become overwhelmed by the process and focus on your family’s goals and desires. Some even get creative with their estate planning!
It’s not just about transferring the largest amount of money possible to heirs free of estate tax and shielding money from creditors, it is about defining and executing your legacy as well as clearly communicating it to all those involved. The most well-intentioned, technically sound plans can reap negative unintended consequences if they are not communicated clearly to the beneficiaries, and disputes can and will arise. See our article on Robin William’s estate troubles as an example of this.
Though your options are virtually limitless, proper estate planning -deciding on the “who, what, when, and how” and executing this with the least amount paid in taxes, legal fees and court costs possible can be a challenging and emotional affair to wrestle with alone. For more information, contact Talley LLP today.