Common Estate Plan Obstacles & How To Overcome Them

At DiversiFi, we help 500+ families with financial planning and strategy. In most cases, we find that estate planning is a major source of procrastination. We’ve compiled the most common reasons people delay or fail to complete a comprehensive estate plan. With each reason, we’ve provided a potential remedy to help you overcome this feeling and take action.

If you’re looking for an accountability partner to help you complete this crucial step in financial planning, we’re here to help!

1. Procrastination.

Many people simply put off estate planning, thinking it can be done later. This feeling may go on for quite some time, and increase their risk of failing to complete their plan. It’s better to take care of estate planning when it’s not driven by an urgent, stressful, or unexpected life-altering event.

Potential remedy: Set a specific date or milestone (such as a birthday or the new year) as a deadline to at least start the process. Ask friends & family members for referrals so you can line up a few contacts and reach out on the due date.

2. Perception of Complexity.

The belief that estate planning is overly complex and daunting can be a deterrent. There can be a lot of components with estate planning, but that doesn’t mean you have to take care of them all at once.

Potential remedy: Start with basic steps, like drafting a simple will, and then gradually add more elements. Consulting a professional will demystify the process and provide you with an accountability partner to keep you on track and organized.

3. Discomfort with Mortality.

Discussing death and incapacity can be uncomfortable. Many people avoid the topic of estate planning because of the feelings that come from discussing such a morbid topic. We tend to approach estate planning the way that we approach heath or car insurance — you don’t intend to fall ill, or get in an accident, but if you do, having this safety net will ensure that the way your assets and family are impacted is in your control.

Potential remedy: Focus on the positive aspects, like the peace of mind and security estate planning provides for your family. Seek comfort in knowing that the effort you put in today will put your loved ones in a much better position to navigate the situation when you are no longer around to help.

4. Concerns about Cost.

The perceived high cost of creating an estate plan can be a barrier. One positive way to look at this is that your one-time payment will provide a life-long benefit.

Potential remedy: Weigh the costs against potential expenses and difficulties your family might face without a plan. Many attorneys offer payment plans, or you can start with more affordable online resources. For reference, we offer Managed Estate Planning to our clients for under $2,000.

5. Lack of Knowledge

Not knowing where to start or what an estate plan should include can be overwhelming. It’s important to find someone who is focused on financial education so that you’re able to learn through the process and increase your confidence around the different components of an estate plan.

Potential remedy: Educational resources, free seminars, or initial consultations with estate planning attorneys can provide foundational knowledge.

6. Believing it’s for the Wealthy.

Some people think estate planning is only necessary for those with substantial assets. This is not true.

Potential remedy: Understand that estate planning is important for everyone, regardless of wealth, for reasons like guardianship for minors and directives for healthcare.

7. Changing Family Dynamics.

People with complicated family situations might avoid estate planning. It may be difficult to make decisions that you think may upset your family, so you avoid the topic altogether.

Potential remedy: Professional advice can help navigate complex family dynamics and ensure everyone’s needs are addressed.

8. Assumption of Automatic Spousal Inheritance.

Some believe their spouse will automatically inherit everything, even without an estate plan.

Potential remedy: Educate yourself on state laws, as this assumption is not always accurate, and certain assets may not pass directly to the spouse.

9. Underestimating the Value of your Estate.

Some individuals don’t realize the combined value of their assets and how they might be affected by taxes or other issues.

Potential remedy: Conduct a thorough assessment of all assets, including retirement accounts, property, and life insurance. Better understand your net worth using our calculator.

10. Feeling Overwhelmed by Decisions.

Deciding guardians for children, executors, or how to distribute assets can be overwhelming.

Potential remedy: Break the process into smaller decisions and tackle them one at a time.

11. Future Updates to your Estate Plan.

Some who have an estate plan fail to update it. Others fail to create one because they are overwhelmed by potential changes in the future and want to “do it once and get it right.” There may never be a perfect time, but getting started is key.

Potential remedy: Set regular intervals (like every five years or after major life events) to review and update your plan.

DiversiFi Capital LLC is a registered investment adviser located in CA and may only transact business or render personalized investment advice in those states and international jurisdictions where we are registered, notice filed, or where we qualify for an exemption or exclusion from registration requirements. Any communications with prospective clients residing in jurisdictions where DiversiFi Capital LLC is not registered or licensed shall be limited so as not to trigger registration or licensing requirements.

Past performance is not indicative of future returns, and investing always carries inherent risks, including the potential loss of principal capital. Any investment strategies are specific to individual clients and may not be representative of the experiences of all clients.

Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.