honestly, Why is estate planning so confusing?

There’s like a dozen different documents all with distinct purposes and they come into play at different times - WHY? I’m going to explain some reasons why estate planning can be a challenging area and give you some practical tips to help cope.

It’s Based on old law that can be hard to understand

Modern property laws, especially laws concerning title to land, come from English common law.  Think, medieval England – kings, knights, lords, poor farmers.  Property law has evolved a lot over time, but some core principles behind ownership remain and they aren’t always intuitive.

For example, you may have heard of the “bundle of sticks” when people talk about owning land.  This refers to the degrees of ownership one can have.  We tend to naturally think of ownership as a yes or no question, but it isn’t that simple.  Different degrees of ownership carry different rights and responsibilities.  For example, what you can and must do as a tenant in a leased office are not the same as those of the landlord who owns that building.

it’s Difficult by design to deter fraud

It may be difficult to remember because technology is such an important part of our daily lives now, but for the vast majority of human history paper – and specific words on that paper – was the only way to verify whether a transaction was legitimate. 

For example, many old legal documents were sealed with wax, and that was a quick way to tell whether a document actually came from the person who owned the particular seal imprinted on the wax. 

We still have authentication devices today.  We still use notaries, and we have digital certificates for electronic signatures.  Just as in the old days, these measures slow the process down and invite review from uninvolved persons to make sure bad actors can’t squeak fraudulent documents through undetected. 

The law is complex because of how it is created 

The United States code – so, federal law – is 54 volumes and tens of thousands of pages.  The Code of Federal Regulations is even larger.  And that doesn’t even touch law made by cases (referred to as case law), nor does it factor in state and municipal law.  My point being: the law is huge. 

And the people that write those laws changes something like every 10 years.  So, a lot of different people write them.

To further complicate matters, the way our state and federal governments write and pass laws is a long and complicated process.  Laws need a wide base of support to have any hope of making it on the books, and even when laws are passed, they must also weather challenges when raised in lawsuits.

On top of that, there’s no single source of oversight of the law.  That’s why every once in awhile you’ll hear about obscure, strange laws that no one understands (or obeys!) that are still technically good law. 

It’s actually a good thing the law and lawmaking process is so complicated and slow to change because we don’t want constant upheaval.  That would make knowing and following the law difficult.  You don’t want to constantly have to prove you own something like your home for instance, that would be ridiculous.  But the tradeoff is the law needs time to catch up to new concepts like new classifications of property, think bitcoin and non-fungible tokens (NFT’s).

Estate Planning Involves Lots of Different Areas of Law

While lawyers study just about all major areas of law in school, their practice of law is usually much narrower in scope.  There are some general practitioners out there, but typically it’s, “inch-deep, mile wide” or “inch-wide, mile-deep”. 

There’s always some overlap of law in practice, we intuitively understand this about certain types of law, like criminal law.  But it is equally applicable to estate planning.  Some planners focus exclusively on tax planning and asset protection, some prefer to work with specific types of clients like young or wealthy families, and still others choose to drill down into very narrow areas of law like long-term care Medicaid planning.

But even what could be seen as a less complex estate - because it doesn’t involve complicated tax, asset, charitable, or government benefits planning - often involves other areas of law.  Property transfers, divorce and custody considerations, and laws governing fiduciaries are just a few of the areas of law that can really escalate what might at first blush look like a straightforward estate plan.

And of course, this is an emotionally charged topic

I think it’s obvious people don’t enjoy thinking about their own demise, so let’s not dwell on it here.

Please Tell Me There’s Some sort of Tip or Hack to make this easier!

There are a couple things I suggest to make it easier to tolerate the estate planning process.

First, understand that it is a process, and it’s important that you participate. 

People tend to think an estate plan is just this pile of documents, and yes, in real life when you actually have to make arrangements and transactions, it is about those papers. 

But an estate plan is a PLAN, it is something one thinks about ahead of time.  This is not just reading an incantation from a book and it makes the probate go away.  Like everything else in life that you need to function properly, you have to pay attention to it.  Don’t start an estate plan until you’re ready to see it through.

Second, educate yourself.  Don’t be afraid to ask questions of your attorney.  If you’re not even sure where to start, read some articles online.  Start with a basic Google search.  Many estate planning firms have high-quality blogs. 

Investopedia is an excellent source if you don’t understand finance-related terms.  Government websites have tons of information available about public benefits.  The University of Cornell publishes the entire U.S. Code and you can click on terms to see their legal definitions if you’re curious.  There is a growing legal community on social media platforms, too.

One caution though, is use this education to give yourself a rough idea, don’t try to shoe-horn your situation into information you get from a particular source.  Even if you own the exact same stuff and you have the exact same goals as your neighbor so-and-so who just did their estate, your documents will necessarily be different because at bare minimum you have different people in your life. 

Lastly, recognize that your emotions do play a part in your estate plan.  Trying to separate them from the act of planning is probably impossible. 

But I think the key is deciding which of your emotions will carry the day.  If fear of dying is all you can think about when it comes to your plan, you’re going to struggle to get through it.  But if you can set aside that fear and focus on another emotion instead, that could make it much more tolerable. 

I am just as afraid of dying as the next person.  But, my husband and I made the conscious decision to try to move that fear to the back burner and focus instead on an overriding urge to protect our family. 

Don’t underestimate the peace of mind just having a plan can bring.

The Takeaway

Estate planning isn’t the easiest thing in the world to do – otherwise everyone would have a plan.  If you’re willing to make time and space for it in your life, and to find a way to sit through the discomfort, it’s more than worth the effort.