3 things most people get wrong about estate planning, says adviser

In the wake of the pandemic, there’s one topic that’s suddenly a lot less taboo, according to Lee Baker, a certified financial planner based in Atlanta.

“We’re getting more calls around estate planning,” said Baker, founder, owner and president of Apex Financial Services and a member of CNBC’s Advisor Council.

“The last 36 months have changed the mindset,” he explained. “Many people have taken this opportunity to reassess.”

However, there are three things that families often get wrong, Baker said.

They think “it’s a scary business, it’s only for rich people, and it costs a ton,” he said. “Neither is necessarily true.”

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Many families fear talking about money, especially financial plans, a recent report from Wells Fargo found. About 26% of adult children would rather deal with their parents’ property after they die than talk about it while they are alive. Additionally, 19% said they don’t mind receiving anything at all, as long as they don’t have that conversation with their parents.

“It’s not as scary as you might think,” Baker said.

A new perspective can help, he advised. “Are there people you love?” Baker said. “If the answer to that is yes, then use the money to make their lives easier.”

Estate planning is a lot like life insurance; it’s less about you than the people you love and care about.

Lee Baker

founder, owner and president of Apex Financial Services

“Estate planning is a lot like life insurance; it’s less about you than the people you love and care about.”

Although most parents plan to leave at least something to their children, only 37% said they currently have a plan in place to pass on their wealth, according to a report by Edelman Financial Engines.

Some online platforms can help with the basics, such as a will, Baker said. Sites including Quicken and LegalZoom offer templates for estate planning documents and guidance on completing them, generally for less than $100. (Here are some of the do’s and don’ts, costs and options for estate planning.)

“It’s pretty quick and pretty painless, and for most people that kind of platform is good enough.”

Otherwise, you should consult a financial advisor, accountant and attorney, especially if you want to set up a trust for your children, designate other beneficiaries or guardians, have questions about appointing an executor and power of attorney for health care, or minimizing gift and estate taxes.

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