ATLANTA — More than 50 percent of American adults do not have an estate plan in place. The reasons people give for not having a plan range from being single to not being wealthy. Neither is a good reason, says Lisa Brown, an accredited estate planner, certified financial analyst and partner at Brightworth.
"Estate planning is important for everybody who has assets to their name and is a legal adult," she says.
There are three documents every adult should have, she says.
Power of attorney for finances: In the event that you are incapacitated, this document names someone to manage your financial affairs, such as arranging to pay bills.
Power of attorney for health care: Again, if you become incapacitated, this spells out your wishes for medical treatment and names the person or persons who can make medical decisions on your behalf.
A basic will: "Everyone should have a basic will, whether they have $5,000 or $5 million to their name," Brown says. "Without a will, the state … dictates how those assets are passed." Spouses may assume that their assets will go to each other, but they would be divided among the surviving spouse and the children, Brown notes.
When it comes to preparing these documents, you may be tempted to use a software package to do it yourself. If your assets are minimal, that may be fine, Brown says. But those with a reasonable balance sheet to their names should have an attorney draw up the packages, she says. Expect to spend at least $500 for basic documents and $1,000 to $3,000 for more complex situations, such as trusts and out-of-state property, she says.