People in unique situations, like family business owners, parents of children with special needs, and people with substantial net worth are often very proactive about enlisting attorneys to craft a comprehensive estate plan. Most others understand the benefit of such planning – stating how your property would be divided up with specificity, appointing decisionmakers for any future incapacity, naming alternate guardians of minor children – but are hesitant to contact an attorney to set their affairs in order. This is entirely understandable. People rarely find themselves excited to consult an attorney in general, and even less so when the purpose is to contemplate your own mortality. The prospect of death or incapacity may seem unlikely for your age, making it easy to put off, and spending money on a backup plan may not seem like the best use of limited resources in a tight economy. Notions of costs in the thousands rather than hundreds or the belief that an expensive “living trust” is needed to avoid probate doesn’t help much either.
But for all of the practical difficulties people know are possible with a lack of planning, few are aware that there can be significant financial consequences of improper planning, even for those modest means. In most cases, even basic estate planning will offset significantly higher hidden costs in the future. After the break, three extremely common examples of these costs.