If you have ever spun a roulette wheel, you know what it feels like as the wheel slows and the roulette ball finally comes to rest. And you surely know that where the ball ends up is of its own making.
In many cases, estate planning is like calling your color and number, then walking over and placing your ball correctly without ever spinning the wheel. It accomplishes your goals without any stressful uncertainty.
Most people in America, however, don’t have any estate planning. Like roulette, if you don’t plan, you never know where the ball will land. You don’t know that your wishes will be respected. But there’s a big difference between not planning for your future and the game of roulette: When you play roulette, you get to see where the ball lands, even if you chose incorrectly. When you don’t plan, you never get to see what happens when the wheel stops because you have passed on.
Estate planning is about documenting your wishes so that when you become incapacitated or pass away, your loved ones will know how you wanted things to be handled. State governments have also created default plans for people who have not documented their instructions. In essence, if you don’t have a will or trust, the state makes one for you based on what it thinks is best.
Each state has its own rules for people who die without a will. There are fifty different ways of handling the same issue.
So which one is right? You are. You are the only one who knows how you want your things to be distributed.
Will the state know who you want to raise your children? Will it know which property or asset you want to go to whom? What if you are remarried: Will your new spouse receive your entire estate, or will your children?
Sometimes the system works, and the ball falls on the right color and number. But other times it doesn’t. It is too easy to lose control over your assets and your property and your legacy if you let the state make decisions for you.
No estate planning is a large pitfall indeed.