Happy New Year to all! This is the last blog of the year and hoping you all have had a joyous holiday season and wishing you a delightful New Year! Did you know that more people die on New Year’s Day than any other time of the year? Sorry, one of my New Year’s resolutions from this year was to create the worst segue possible. Block checked.
Yes, it’s true. The winter months of December, January, and February are historically the deadliest. And for many the hangover from New Year’s Eve can be most permanent. If you are one of our many and growing subscribers to this blog, or have viewed our webpage on estate planning, you know we take a more classically Stoic approach to the practice. “The Joy of Estate Planning:” that’s how we view it. Embrace each day, celebrate life, every moment is a gift. It’s a beautiful thing. Also, try not to leave a steaming crater when you pass.
I recently got a call from one of my favorite clients. Or, I guess I should say former clients. I defended her in a Trust Litigation matter some years ago and we were fortunate to get a complete defense verdict at trial. She calls me every month or so to catch up and give me life advice. I really have the best job in the world.
This call was a little more somber. She had been diagnosed with cancer. And given 6 months. When I tried to ask how I could help, she curtly remined me that her affairs were in order, and we needn’t waste time on that nonsense. She then spent the next half hour coaching me through my business matters and advising me on my personal life. I could not be more fortunate to have friends like Ellie.
So as you contemplate your over-spiked eggnog, or how long it will take to return that horrible sweater you received, perhaps you add to your New Year’s Resolution list fiiiinnnaly drafting that Estate Plan. I know. You need more incentive. Okay, I am here to help. Let’s take this on from a purely financial perspective. You know the costs to get it done, a few thousand dollars and a couple hours of your time with a wonderfully warm and entertaining guy. And if you don’t want to do it now, how big is that crater looking, financial?
Here are some bullet points:
Guardianship Appointment Costs – Do you have minor children? Do you have the proper legal documents of appointment in place should you pass unexpectedly? This could cost into the tens of thousands of dollars to get this done without the proper paperwork in advance.
Probate Administration costs – Just have a Will? Visit the probate calculator on my website to see how much probating of your estate may cost, just in administration fees. For a million-dollar estate you are looking at $23,000 in attorney’s fees and that same amount again in administrator fees. (Keep in mind, if your estate includes real estate, that calculation is make based on the market value, not your equity. So if you own a home in Hawai’i or California, you will likely hit this quite easily.) Add to that court costs, appraisals, and other professional services required to finalize your estate in probate court.
Estate taxes – If your taxable estate has any assets in Hawai’i, and your total taxable estate is more $5.45M, your estate will be sending the State of Hawai’i a check for 10 to 20% of your taxable estate. Or you could create a Trust and avoid all or most of this tax. (See October 28, 2020 Blog on “California Residents Paying Hawai’i Estate Taxes.”)
Medicaid recovery – Didn’t plan for a way to protect your estate against medical, nursing home, or home care expenses? The government may be looking to your estate for reimbursement after you pass. (See May 27, 2020 Blog on “How the Medicare ‘Lookback’ Period Can Shrink Your Estate.”)
Brokerage fees, Insurance and Maintenance Costs – The longer your estate has to remain open, the more likely it will be consumed by administrative costs before it can be passed to your heirs. (See my many Blog articles on the costs associated with Probate Administration.)
Probate Litigation – Waiting too long to compete your estate plan can lead to it being challenged for capacity. (See my FAQ’s on the Trust and Probate Litigation page for more information.)
Okay, I will stop. Was that a little depressing? Yea, for me too, because it is all so avoidable.
Takeaway
Have a very, very Happy New Year. And in the coming year: take the trip, buy the shoes, eat the cake, and don’t every hesitate to let those around you know how much you love them.
Whether Legacy or Business Planning, Contact CASHMAN LAW today for a free consultation to get the Plan You Deserve.™
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