Remember the story of the Three Little Pigs? In the classic children’s tale, three pigs leave home and set off to seek their fortunes. Each of them meets a man with certain building materials and convinces the man to give them materials to build a home to keep safe from the big, bad, wolf. One pig builds his home out of straw, one from sticks and one from bricks. Once the wolf discovers that the pigs have each built homes, he acts nicely and tries to convince the pigs to let him into the pig’s house to terrorize and destroy. When the pig refuses, the wolf huffs and puffs and blows down the first two pig’s houses. Since the third pig’s home is made of bricks, the wolf cannot blow it down, but he is not deterred. He continues to lie and connive in an effort to persuade the third pig to let him into the pig’s house. In the end, the third pig is just too smart for the wolf. The pig convinces the wolf to come down the chimney. Without thinking it through, the wolf jumps down the chimney directly into the pot of boiling water and that’s the end of the wolf.
So what can we learn about estate planning from the Three Little Pigs? Plenty!
Lesson 1. Each of the Three Little Pigs had a home. EVERYONE has an estate plan. In fact, everyone has THREE estate plans. The one they want, the one they think they have and the one they actually have. The documents that will be included, how it is designed, what tax and asset protection features are included, who is in charge of it, and who helps you build it are different from family to family. That’s why it’s important to choose your helpers wisely!
Lesson 2. BEWARE! There are lots of wolves in the world. And NONE of them have your best interests in mind! From a minor or special needs child to the IRS, from protecting your hard earned assets from lawsuits, “The Strong Arm,” and probate, and from protecting your kids’ inheritance from creditors, taxes and a marriage gone bad, the issues that can destroy your family and your legacy are legion. Identifying the issues that cause problems and may result in your wishes not being carried out is critical to creating the right estate plan for you. Here’s a few examples:
Who will make medical and financial decisions for you if you cannot make them for yourself?
Who will serve as Guardian of your minor / special needs children?
Who will assume responsibility for administering your estate after your death?
Who will manage the inheritance you leave to your beneficiaries?
Do you want to protect your assets in the event of your spouse’s remarriage?
Who will inherit your estate after the second one of you dies?
In what percentages?
How and why will those assets be distributed to your beneficiaries?
Who will inherit your estate if you and all of your descendants are deceased?
Your thoughtful answers to these questions, and a few dozen others, will be the catalyst to making sure that you and your assets are taken care of while you are alive and well, if you become incapacitated, and after you are gone. You can ensure that what you have goes to whom you want, when and how you want at the lowest possible overall cost to you and those you love.
Lesson 3. Doing it wrong is worse than not doing anything. Doing it wrong is like the two pigs that built their houses out of straw or sticks. They spent time, money and effort on something that ultimately provided no protection. What it gave them was a false sense of security. If you do no estate planning, the Colorado Probate Code will determine where your property goes and who takes care of your children, your guns and your pets. Maybe it’s not the best choice, but sometimes it beats the alternative of the family fights that will result if you do it wrong. HINT: LegalZoom and other online or store bought software programs are many times worse than doing nothing! You’ve spent your whole life working to build something of value. Shouldn’t you spend a few hours making sure it doesn’t die with you?
Copyright©2020, Goldberg Law Center, P.C. All Rights Reserved.