What is the greatest risk? The word “risk” conjures up many different scenarios depending on your personality. Perhaps when you hear about life’s greatest risks you think of adventures like skydiving, climbing Mount Everest or exploring the depths of the ocean. Maybe you’re on the other end of the spectrum and life’s greatest risks look more like dying your hair or driving five miles over the speed limit. But have you ever considered that the greatest risk of all could be doing absolutely nothing?
This could not be more true when it comes to your estate plan.
Despite the global pandemic that forced people to confront the issue of mortality, the fact remains that only 33% of adults have any estate planning documents in place.
Here’s how doing nothing, not having an estate plan, can place an unnecessary burden on your loved ones:
The Cost of Dying
Dying is expensive. An article from December of 2020 was titled “Can you afford to die in your state?”. No one wants to say it like that but it’s true. As the article points out, the average cost of dying in the state of Tennessee is $19,068. The average funeral costs are almost 7k. Medical costs related to dying average just over 12k.
Probate Court & Legal Fees
Attorneys in Tennessee are allowed by law to charge the client (your heirs) up to 5% of your estate. Depending on whether or not you own a home and property, that 5% can add up quickly. And that’s just the attorney’s fee. Your loved ones will also be responsible for the filing fees, Clerk’s fees, and a handful of other legal, professional, and court based fees. Not to mention that probate takes TIME. In Tennessee, probate averages 6 months to 1 year. Some larger estates can take up to 2 years to completely resolve.
“In this area”, Attorney Stan Pierchoski says, “I typically see around 6-8% of the estate being absorbed by court and legal fees with 8-10% being the national average. Even our most involved trust plans fall well below this cost.”
Unpaid Medical Bills
If you pass away while still in debt from unpaid medical bills, did you know that there are laws that can hold your children responsible for those payments?
Tennessee is one of 30 US States that has what is called “Filial Responsibility Laws”. These laws ultimately hold adult children legally responsible for their parent’s medical bills and nursing home costs. In fact, some states impose civil or criminal penalties if the bills are not payed, including fines and potential jail time. In Tennessee, the state can recover a financial amount equal to the amount paid out for the cost of care. While there are a few defenses that could prevent your children from having this financial responsibility placed on them, it is a risk that we hope no parent has to take.
While all of the above are focused on monetary costs, we simply cannot ignore the emotional cost of losing a loved one. Having to go through the grieving process AND deal with courts, mounting fees, and unpaid debts is a lot for anyone. So how can you help your loved ones get through this difficult time?
Doing nothing is an option. In fact, It is an option that 66% of adults choose. Unfortunately, their children could be the ones who pay for it, making it a huge risk.
Planning ahead puts the cost on you now, however it is a mere fraction of the cost that would fall on the shoulders of your kids if there is no plan in place to protect them.
There is no risk in planning. Even if you aren’t here to watch events unfold, a proper plan in place gives you the peace of mind in KNOWING exactly what will happen with your affairs and your loved ones.
Estate planning is all that we do here at Pierchoski Estate Law and we are all about education in the area of wills, trusts and guardianship. That’s why we hold our free seminars! Give us a call at 931-363-7222 to ask about the next one!
A Note from the Attorney, Stan Pierchoski:
The practice of law is a second career for me. After obtaining Master of Science degrees in both Nuclear and Mechanical Engineering, I worked in the Nuclear Power Industry for 15 years. Always having an interest in law, I attended and graduated from law school and founded the Pierchoski Law Firm in 2002 in Pulaski, TN. For several years I practiced as a criminal defense, trial attorney. After my parents passed I became interested in Trust and Estate Law and felt a strong calling to change my practice to the Estate Planning area.
For years I have been exclusively doing trust writing and wealth planning and have become proficient at it. Over the last several years my practice has evolved to serve all age groups including elders and Medicaid Planning. I am always open to your questions and am more than happy to chat with you about your concerns. Give me a call or stop by my office. You’ll be glad you did!