Personal finance expert Dave Ramsey has joked that to show you hate your family, "leave unclear instructions and no will." Without knowing your final wishes, those close to you could fight over your estate or wind up paying your end-of-life costs themselves.
As shown in Empathy's annual Cost of Dying report, an average family pays nearly $13,000 in final expenses. Estate settlement can also take an average of 13 months -- and often longer, if the estate must pass through the full probate process. If your loved ones struggle to manage these and other tasks, the burden may also affect them physically and emotionally.
What Can Happen Without Proper Planning
When a crippling injury or illness strikes and "your time comes," if you haven't left directions, others could make choices you wouldn't have wanted. Here's what can happen under Maine law without proper estate planning:
- No power of attorney or advance health-care directive: A court, and regarding health-care, a doctor could decide for you; your loved one's may have to go to court to appoint a guardian or conservator to manage your affairs.
- No will: A court decides who will get your assets; depending on state probate laws, they could go to your next of kin. If you have no living relatives, the state might get them.
- Minors or adults with special needs: A court could appoint guardians or conservators whom you wouldn't have wanted to care for your dependents.
- No burial or memorial plans: Your next of kin must decide, while they grieve, on your final resting place and whether to hold a funeral. If you didn't prepay for these services, they may end up covering the costs.
Without guidance, the extra responsibilities involved could cause those close to you to pay the price in other ways.
Average Estate Settlement Costs and Expectations
From debts to a memorial service, final expenses mount quickly. Resolving financial matters and probate can be a slow process and take longer than those involved expect.
Debt resolution: If your estate passes through probate, loved ones could pay out of pocket for bills, an accountant, and other costs. The Empathy report found that families paid an average of $4,384 to settle financial matters. Of that, an average of $1,100 went to accountants and $1,624 went toward paying bills. "It took families an average of 12.5 months to resolve all financial matters, and over that time, they spent 20 hours per week on average (with a median of 12) dealing with these tasks.” Sixty-two percent said the process took longer than they expected. For 55 percent, it was more complex than they thought.
Settling probate: Probate is a court process that determines the validity of a will and who will receive estate assets. Estates with few assets may sometimes undergo a simpler form of probate. (In some cases, they can avoid it entirely.) Nearly half of the Empathy survey respondents (46 percent) had to go through the full, court-mediated process. Almost 60 percent found probate to be more involved than they expected, and 61 percent said it took longer than they anticipated.
Funeral and burial expenses: According to the National Funeral Directors Association, the median cost of a funeral in 2021 was $7,848. The Empathy survey takers paid an average of $3,584 to a funeral home. Those over age 60 paid nearly $1,000 more. (Older people can be more susceptible to influence.) Burial plots cost an average of $1,841. The respondents also covered other expenses, such as catering ($602 on average) and officiants, priests, or other clergy (a median of $472).
The Effects on Friends and Family
Completing these duties might also come at the expense of your loved ones' health and well-being.
The effort involved, combined with existing commitments, can lead to time off from work, poor productivity, and strained relationships. Among the survey participants, 93 percent experienced at least one physical or mental health symptom. The effects, which sometimes lasted a few months or more, included anxiety (83 percent), confusion (73 percent), and changes in sleep patterns (76 percent).
How an Estate Plan Helps Prevent Challenges
The Empathy report revealed that in 2022, for families, the probate process cost an average of about $5,000. That price may rise if the deceased didn't leave clear instructions. By contrast, the fee for a simple will drafted by an attorney can be as low as $450. Rates for an entire estate plan vary depending on the complexity. But compared to average probate costs, they're a fraction of the overall price your family could pay if you leave no plans. With your final wishes in place, the memorial and estate settlement process will likely be shorter and those close to you may manage it better. And a good estate plan can help it happen without conflicts.
You could have valid reasons for not starting an estate plan, whether because of a lack of money, time, or motivation. You might also have different priorities. To quote the Ramsey Solutions team, if you're like the average American, you spend hundreds of dollars a month on entertainment. Why not spend a small part of that on an estate plan that can calm your concerns and protect your family's future?
Our experienced attorneys would be happy to help you create an estate plan tailored to your needs and lifestyle. Call (207) 377-6966 or contact us online today.