Too many people put off doing any kind of estate planning and end up passing away without so much as a will. As we’ve discussed here in a previous post, when that happens, assets are distributed to family members based on state law. That may be nothing like the deceased would have intended.
The lack of any estate planning can also have serious consequences for handing down property – particularly real estate. It’s been estimated that as part of the “Great Wealth Transfer” of some $124 trillion that older generations are set to hand down to younger ones in the upcoming decades, approximately $2.4 trillion of that is in U.S. real estate. Experts say that potential heirs to billions of dollars in real estate won’t receive it due to a lack of careful (or in some cases any) estate planning.
Too many people ignore planning as well as important conversations
One study found that just over half (57%) of Americans have a will. While that is an overall percentage, and there are variables like race and education level, it’s not just people who have few assets or a negative net worth that forego estate planning.
Another problem is that many people don’t take the time to communicate their wishes with their loved ones or find out what assets they would find most valuable given their own goals and circumstances. This is true even among those who have an estate plan.
Another study determined that more than two-thirds of parents 55 and over with $500,000 or more in investable assets haven’t discussed their plans for passing on their wealth with their children.
How inherited property can be lost
By not discussing valuable assets, such as homes, with adult children, parents may leave them property that they can’t afford to maintain or isn’t practical for them to have. People often need to sell their inherited property to avoid dealing with insurance, taxes, liens and more to companies that specialize in taking homes off people’s hands — but at a substantial loss. Sometimes, children and other heirs end up fighting in court over a home, which can cost them a considerable amount of money and permanently destroy relationships.
No one enjoys talking about what will happen after they die – let alone codifying detailed instructions. However, by having these discussions and creating a solid estate plan, Georgia residents can help ensure that the assets they’ve worked so hard to accumulate can remain in the family long after they’re gone.