Estate Planning Book Excerpt

I Am Not Rich! Do I Really Need an Estate Plan?

Many of my clients do not perceive themselves as rich. They have a house, a car, some retirement and some savings. Many of them are middle class and a majority of them have worked a regular job most of their lives. They have regularly heard on TV and from their friends that everyone needs to do some estate planning, but they really don’t believe in their hearts that they have enough money to worry about it. In addition to that feeling, they sometimes believe that they already know where their estates will go when they pass away. Some of them believe that everything will go to their surviving spouse and others believe that the surviving children will take everything. Sometimes they are correct in these beliefs, but often they are not correct at all.

The State of Oklahoma has an estate plan for you if you die without creating your own plan. Unfortunately, the Oklahoma estate plan can be put into effect during the probate process, whether you intended to have a probate or not. Unlike the Oklahoma state plan a true estate plan, made in advance, can protect your assets from the ravages of creditors and even Medicaid. Without a plan, most of your assets might be lost if you should join the ever-growing number of people who have to spend time in skilled nursing care.

An estate plan is so much more than a wish or expectation that your family members receive your property at your death. Your estate plan can explain exactly what you want each member of your family to receive, when you want them to receive it, and how you want them to receive it. An estate plan can identify the person you wish to care for your minor children in the event you are unable to be there for them. Your estate plan can protect you and your family members from the ravages of lawsuits, predators, creditors, and the requirements of Medicaid. Your estate plan can set in place a complete plan for your care should you become incapacitated, including who you would want to manage your affairs and what you expect them to do. It is possible for your estate plan to help assure that you have dignity and resources in your later years, even if you are confined to the nursing home. There is such a great deal to gain from having an estate plan and so much to be lost if you do not have one. So to answer the question I posed at the beginning, I must say yes, even if you are not rich, perhaps especially if you are not rich, you need an estate plan!

By way of illustration, let me tell you the story of Mr. Detroit (names have been changed to protect the identity of the guilty). Mr. Detroit came to my office a few years ago. He was a somewhat elderly gentleman, but one who was in reasonably good health. He was one of the people who saw himself as not really rich enough to need an estate plan. Mr. Detroit decided to do the absolute minimum estate planning, even though he owned his own home, a decent car, and had a reasonable level of income. Unfortunately,  Mr. Detroit’s life did not proceed as he imagined it would. The next time I saw him, he was a nursing home resident whose hearing had deteriorated and whose vision was almost gone. There was not enough money put aside to pay for Mr. Detroit’s hearing aids, and no one knew when they had last seen his glasses. Mr. Detroit, who was mentally sharp, was unable to communicate effectively and had so little money that he had lost all of his freedom. To make the situation worse, Medicaid had filed a lien against his home and the home would soon be fully taken by that lien. It did not have to be this way. Mr. Detroit could have done a real estate plan before being placed into skilled nursing care. Mr. Detroit could have had thousands, even tens of thousands of dollars, set aside to make his life in the nursing home less miserable and allow him the freedom to attend his church, have a dinner at a nice restaurant, travel to see a friend or family member, or even purchase decent clothing. Unfortunately, life almost never turns out this way without an estate plan. However, with an estate plan, you can retain much greater autonomy and suffer less misery.

Yes, my friend, you do need an estate plan.



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