Far too many people ignore estate planning entirely, and their reasons vary from person to person. It is probably safe to say that the most common explanation that most would provide would be that they have plenty of time to make these plans when they get old and gray. This may or may not be the case because nobody knows exactly when they will be passing away. The stark reality is that a lack of preparation can have devastating consequences on your family if you were to pass away unexpectedly.
There are others who may have put together a last will at some point in time expressing how they would like their remaining assets directed after they die. They don’t want to make any changes to the recipients so they may feel as though they don’t need to consistently update their estate plans. This can be a mistake because of the constantly changing parameters of the estate tax.
Many Americans proceed with the assumption that the estate tax is not relevant to them because they are not rich. They get this idea in their minds and they simply forget about the subject. But if you educate yourself you will see that the federal estate tax exclusion is going to be reduced to just $1 million in 2013, and the rate of the tax is set at 55%.
Spectrem Group tells us that there are around 8.4 million households in America that have total assets exceeding $1 million. If a relatively ordinary working couple does all the right things over a sustained period of time they may well accumulate resources exceeding this amount without ever considering themselves to be wealthy.
The stakes are too high to stick your head in the sand and rely on misguided assumptions. If you have not yet developed an ongoing working relationship with a good estate planning attorney, now may be a good time to do so.