Estate Planning Myth: “I’m just too old…”
June 1, 2013 - Posted by: admin - In category:
In the world of estate planning, there are a significant number of myths, resulting in a great deal of misinformation and misunderstanding (ok, enough with the “M” words). In any event, over time, we will address several of these myths. Today’s subject of myth-busting: “I’m too old for estate planning”.
Before you laugh, you should know that someone actually said this to me the other day. I was talking to a nice gentleman at church. I don’t know his exact age, but I guess he is about 67. He asked about my occupation and after a little more conversation, said, “well, I guess I’m just too old for that now.” Before I had a chance to respond, we were interrupted and then the meeting started. However, I have thought much about this gentleman’s response and believe that there are likely many people out there with a similar misunderstanding.
My friend may have been thinking that “estate planning” is the exact same thing as “financial planning”. It is not. Estate planning and financial planning are of course related, but they are also quite separate and distinct. Estate planning is a more expansive concept than financial planning. It certainly includes financial planning, but also entails more things. For example, estate planning addresses ownership of all assets, planning for poor health, incapacity and death and transfer of all types of property during life and after. Estate planning also concerns itself with guardianship and other care of young and special needs dependents. On the other hand, financial planning is concerned mainly with finances–albeit several types of financial assets.
Now, how does this comparison of estate and financial planning relate to my friend? Good question, glad you asked. Most financial planning gurus recommend that we start saving and investing while we are very young, to benefit from compound interest and market growth effects, among other reasons. It is therefore natural that someone who is no longer “very young” would think that it is “too late” for them to benefit from financial planning. However, logical as it may seem, this is also not true. It is NEVER too late to benefit from sound financial planning. Rather, it is probably the case that the older a person is, the MORE vital it is for that person to focus on proper financial planning.
Likewise, there is NEVER a time when it is too late to undertake good estate planning. Ok, I guess that might not be exactly true–after a person has been buried in the grave, it is too late for THAT person to do estate planning…:). All joking aside, whether a person is 18, 28, 58 or 98–good estate planning, which includes sound financial planning, is something that is vitally important and available to such person. The tools and techniques change over time, depending on age and life circumstance, but the overall principals remain the same.