Mediocre Estate Planning Makes for Massive Opportunity Costs (Part 1 of 3)

[WARNING: The following material derives from 100% all-natural, real intelligence. No artificial ingredients.]

When we speak of “getting your affairs in order,” people are inclined to think of the phrase “Estate Planning.”? However, it’s doubtful they really have a complete and balanced appreciation of all that really entails.? If you don’t know what’s involved, it’s particularly difficult to approach the topic with any modicum of mastery.? Inept efforts at Estate Planning take both forms of error: absence of the positive and presence of the negative.? Now, Estate Planning is what I personally refer to as the first of Three Pillars of (Life) Planning… a part of the whole that does offer the “complete and balanced appreciation.”? I’ll presently endeavor to briefly flesh out some of the issues in play.?

Estate Planning is the first Pillar not necessarily because it’s the most important, but rather because it’s the most “accessible…” albeit it’s also terribly misunderstood.? While relatively few seem to contemplate it with any degree of sincerity that breeds real-time robust planning, most people are at least reasonably in tune with the fact that they have a pulse today… but one day will not.? Likewise, people are familiar with phrases like “you can’t take it with you” and “I’ve never seen a hearse towing a trailer.”? In other words, your “stuff” is scheduled to outlast you.? That means all of “my stuff” one day no longer will be.? In that vein, many – if not most – people have at least heard of a Will or perhaps a Trust.? Granted, they may not know much about either, but they are at least aware of them as potential ways to deal with this inevitability.? Thus, “Estate Planning” is a Pillar that people have at least some vague awareness of.? This provides an on-ramp, or nice starting point, to build a complete conversation – for those with an ear to hear.?

In addition to rudimentary familiarity with the topic generically, Estate Planning is also the first Pillar because of the urgency applicable to making some such arrangements.?? See, I also spoke of Estate Planning as being greatly misunderstood.? Indeed, generally speaking, people tend to think of Estate Planning as “end of life” planning… or even “death” planning.? Consequently, it’s typically viewed as something they must take care of – if at all – before they die.? This is weird on a surface level because, of course, the vast majority of us have no earthly idea when we’re going to die.? Plenty of people every single day have a clash with the reality that life was much shorter than they’d guessed it would be. ??Additionally, it’s problematic to misconstrue Estate Planning as “end of life” planning because, well, it isn’t.? After all, I don’t refer to it as the first of Three Pillars of (Life) Planning for nothing.? The fact is that there are various time-sensitive decisions and moves you can make that can optimize your financial condition – else you pay the price for missing the window of opportunity.? For these, and other, reasons I labeled my Course on the Estate Planning topic “The Burning Match.”??

In addition to being somewhat familiar to people and also inherently urgent, Estate Planning is likewise the first Pillar because it’s the most mandatory… which is ironic because it’s routinely neglected (which is why it’s a pervasive part of the mandatory “welfare” system).? See, you can get away without doing an Estate Plan, but you cannot get away without having one.? At its core, and this is admittedly a highly reductionistic view, Estate Planning involves giving away your “stuff” after you die.? Since there is a “public policy” interest in there being an orderly, indeed predictable and standardized, method of distributing the stuff that outlasted you, your state legislature created a “welfare” estate plan for you.? In fact, this default, welfare Estate Plan is actually already operational – whether you like it or not (or even know what it is and what it does).??

Thus, it’s all the more helpful to dispel the myth that you just need to do an Estate Plan “in time” (i.e. - before dying – which you can doubtfully put a date on) and even “just in time” to make time sensitive decisions.? Indeed, it’s not the case at all that you don’t yet have an Estate Plan and merely have to beat the buzzer (however defined) to install one.? No, in actual fact, you already have one.? Actually, it’s more accurate to state that your surviving loved ones have one, as it relates to you and your eventual death.? Indeed, they are the ones who will be told how everything goes down – unless you override the default, welfare Estate Plan and impose your own.? It’s up to you to affirmatively, proactively “opt out” of the welfare system Estate Plan.? If you don’t, some judge will be telling your surviving grieving loved ones how the world works… pursuant to this default Estate Plan that you bestowed upon them through your lethargy.?

When you merge some of these realities together, it become increasingly difficult to view “Estate Planning” merely as something you only need to take care of before the deadline of your death.? Of course, you have no idea when that is – which is why people buy life insurance.? Thus, assenting to the unpredictability of death as a motivator for purchasing life insurance can be easily parlayed into proper Estate Planning well in advance of death, other deadlines, or even the inadvertent activation of your “welfare estate plan.” ?Realizing that you’re not invoking one but, rather, replacing one can properly frame the matter and serve as an additional motivator to affirmatively “opt out” of the State’s estate plan for you – currently on standby – that you likely know very little about.? Only by establishing YOUR plan, before you need it, can you for certain have confident Peace of Mind.? I like the phrase Jay Clouse once used: “financial hygiene.”? Importantly, Estate Planning decisions have a proximate impact on your financial hygiene by producing consequences (positive or negative) for the other Pillars; namely, Asset Protection and Tax Mitigation.?

The first Course in Your 3-Hour “LAW DEGREE” deals with the Top Tenet of Estate Planning.? Hopefully you can begin to see why I call the Course “The Burning Match.”?

For those who reasonably expect to die some day, next time we’ll explore the use of Trusts and LLCs in Estate Planning.??

Until then, you can grab my CheatSheet for “The Burning Match,” which summarizes this #1 Rule of Estate Planning:

https://1.generationalwealthbuilder.com/redirect-law-degree-main-optin