Nearly 40 percent of high net worth individuals have not engaged in any form of estate planning. Given the multiple changes to federal estate tax laws over the past decade, and looming uncertainty over tax reform under President Trump, many wealthy people have simply become exhausted over the mere thought of estate planning.

Regardless, estate planning still matters in an uncertain tax environment. Here’s why:

Clarity.

Your plan provides direction to an executor or trustee to ensure your wishes are carried out. For instance, formalizing a guardian for your children and determining the beneficiaries of your assets are a few items you’ll surely want to indicate beforehand. Think of family and friends who, without this guidance, would be left to “figure it out” while dealing with grief.

Asset identification.

Upon your death, heirs and their advisors will rely on your list of assets to locate accounts and documents to settle your estate. The simple act of identifying assets in advance is a huge help.

Asset titling.

Incorrect or haphazard titling of assets or accounts can derail even the most thorough estate plan. For example, naming the eldest child on an account as a form of convenience may inadvertently displace other children. Titling should be reviewed for every major asset and account, including items like life insurance and executive compensation. For clients with trusts, it’s imperative to retitle assets and accounts in the name of the trust. 

Power of attorney.

A durable power of attorney (POA) names someone to make financial or health care decisions for you in the event you become incapacitated. Without these specified powers in place, it can become very costly and time-consuming for the court to determine a representative for you. Additionally, everyone over the age of 18 should have a POA in place. Parents lose the authority to make health care decisions or manage money for their children once they are no longer minors.

Digital assets.

Email, social media, domain ownership, photos, etc. are a new and unique challenge, as federal legislation regarding digital property does not yet exist. Currently, the Fiduciary Access to Digital Assets Act provides the clearest legislation for these assets. The act extends the traditional power of a fiduciary to manage a person’s digital property, but restricts a fiduciary’s access to electronic communications unless the original user consented via a will, trust, power of attorney, or other record. The act has been adopted in over 20 states, including Oregon and Washington.

It is important to note, estates with no plan may go into probate by default. In this process, the state, rather than the deceased, decides how to divide assets which are not held jointly or for which no beneficiary is designated. It becomes a court matter and is put on public record. This increases the time necessary to settle the estate.

Delaying the decision to plan your estate is, in effect, a choice which may have undesirable consequences.