What Can Happen When You Don't Have an Estate Plan in Place Because You Think You Don't Need One?

Imagine standing next to the hospital bed of your dearest friend, feeling completely and utterly helpless. She is in a coma, some tough medical decisions need to be made, some bills at home need to be paid, and nobody knows what to do. Everyone has different ideas about what should be done and who should do it. It's bedlam. Everyone is fighting, even shouting, the health care professionals have had to usher people out of the room. She talked to you about what she would want if this ever happened, and even went into pretty specific detail about her wishes, but you're not a family member, just a close friend who has been through so many stages of life with her. Her family has never been on her side, and they all have different ideas about what to do for her. And none of them sound quite right or in alignment with her wishes.

She never got around to doing any "real" estate planning because she didn't think any of her family would care enough to show up in a situation like this. She also doesn't have much in the way of assets beyond her dog walking business ("Who would want that?" she always said) and didn't think it would matter at this point. She filled out the health form at her doctor's office naming you as her health care agent, but that isn't doing much good at an out-of-state hospital on a holiday weekend where she ended up following a horrific car accident. Back home, she has a few hundred dollars sitting in her bank account, and a beloved dog at the boarding facility where she left him for the weekend (with some of the cash at the bank earmarked just for that).

Then one of the family members says something that makes your hair stand on end....

"Someone has to step in and sue the jerk that caused the accident."

It's her uncle. The one you never liked. The one she had reason to hate since she was a kid. It felt like he had no reason to be there at all. And he's the one most loudly advocating terminating life support. You know she wants to be given some time before that happens and his loudness is drowning out your attempts to share what she told you in the past. Her mom is on your side, but she has always been quiet and not one to stand up for herself - which is why your friend didn't want to saddle her with any responsibility or burden at all.

And now her uncle is already talking about getting appointed by the court to make the medical decisions and take on the role of suing the other driver. All you can think of is "What if she can actually hear all of this going on? What kind of an impact is this having if she can? What the heck do I do?"

Whoa..... That's a lot to think about isn't it?

This may sound like a scene right out of a television drama, but these are the kind of situations that do happen in real life. And when we don't leave a clear set of instructions for what we want to have happen and who we want to make decisions for us if we can't, then chaos can very easily ensue. People we thought would never take an interest in us or our estate step right up when there is the possibility of money to be had.

I can't imagine there is a person in the world who would actually want this to happen to them or anyone they care about.

I want you to know that it is easy to prevent with some pretty basic estate planning. The horror story I described above can happen to anyone - and it's much harder to sort out if you haven't documented even a basic road map for your family so nobody has to guess your wishes for what you want and who you want to step in if you need them.

I would like to share with you a few common reasons people give for not getting their estate planning done and why those reasons shouldn't keep you from taking some form of action.

1) "I don't have enough for anyone to worry about." It's easy to think this. But the people with the least amount of assets are often the ones who benefit the most from some basic planning. Making a Transfer on Death (TOD) or Payment on Death (POD) designation for bank or brokerage accounts will help your family avoid the probate process when you are gone, but it will do nothing in a situation like I described above - if you're incapacitated. What if your friend wants to get your dog out from the boarder, but doesn't have the cash to do it? What if you are likely to recover, but it will be awhile and someone needs to make your car or rent or electricity payment? There are loads of other reasons why you need a plan even if you don't think you "have enough" to warrant one.

2) "My parents/siblings/family will know what to do." Even if this is true (and often what one person thinks should happen is not what someone else thinks should happen), unless you have named someone in the right legal format, a hospital or doctor can't just take someone's word for it. It's essential to have the right forms in place.

3) "I already did something at the doctor's office." That's all fine and dandy until you go on vacation or travel for work and nobody: knows that you did it; or has any idea who your doctor is. That's not going to work in a lot of situations.

4) "It's going to cost too much to get it done." Not doing it is going to cost someone a lot more down the road. Not just the filing and legal fees to get appointed as a health care or financial power of attorney, but also the energy and attention away from supporting you to get better during a time of crisis. And unnecessary additional stress at a time when it is least welcome.

The stress, the money, the family friction - all of these things can be reduced or eliminated by getting even a basic set of documents in place.

And if you own real estate or have kids, then you likely would benefit from much more than "basic" documents. We will talk about that another day.... so check back for more on that if that's your situation.

One thing I have learned over the years is that a lot of us humans don't enjoy spending money on things we "need" or from which we would benefit. Like a roof or new tires. But, like anything else we "need," estate planning is an area where an ounce of prevention is worth a pound of cure.

If you would like to talk more about how you can take care of your planning needs, reach out. Book a free 15 minute call to learn about your options - whether it's working with us or another option more appropriate to your situation.

By the way, were you left with any lingering questions about your friend's dog? People name guardians for their kids if they are under 18. You can make sure that people know who should step in to take care of your pets - you can even leave assets behind to fund their care - if you can't be there.