The Hidden Costs of Delaying Estate Planning

Your estate plan serves as the roadmap for what happens to your assets, income, and healthcare decisions while you are living and have capacity; if you are incapacitated; and when you pass away. A well-designed estate plan can help provide clarity regarding your wishes and may help facilitate the transfer of assets to your heirs while reducing potential complications.

Without an estate plan, the state steps in with default “intestacy” laws that decide who inherits what, and your family will likely face probate court,¹ potentially costly legal battles, and emotional stress. While many people assume estate planning is only for the wealthy or the elderly, in reality, anyone over 18 can put basic safeguards in place.

Below, we’ll explain the foundations of an estate plan, common pitfalls, and why planning early may save headaches down the road.

Four Key Documents

Estate planning centers on four foundational documents: a pour-over will, a revocable trust, a durable financial power of attorney and a healthcare directive (with a healthcare proxy).

• Pour-over Will: Acts as a safety net for your trust. It helps direct assets not previously transferred into your trust following death, subject to applicable probate procedures and state law.²
• Revocable Trust: Holds your assets during your life and distributes them after death. A properly funded revocable trust may help reduce or avoid probate for assets held in the trust and gives you the flexibility to update terms at any time.³
• Durable Financial Power of Attorney: Allows someone you trust to manage your financial affairs if you become unable to do so. If you lose capacity, it may allow your designated agent to manage financial matters, including paying bills and handling financial affairs.⁴
• Healthcare Directive and Proxy: Lets you state your medical treatment preferences in advance. A healthcare proxy names someone to make real-time care decisions that align with your wishes, but only if you’re unable to make decisions for yourself.⁵

Without these documents or a clear plan, probate court is often the next step upon death. In an uncontested probate, costs and delays add up quickly. Families can typically rack up $3,000 to $10,000 in fees and face months or years of delay.⁶ If heirs end up disagreeing, costs can potentially climb even higher. People often think these disputes won’t happen because their family gets along, but grief and ambiguity around assets, a vacation home, grandma’s clock, or dad’s shotgun can trigger unforeseen arguments. Intentional planning lets you name the right people to the right roles in your plan, set rules for real estate and investments, and direct heirlooms so that emotional triggers don’t turn into lawsuits.

Why Starting Early Pays Off

Early planning helps you customize your estate strategy to your family’s unique needs and avoid rushed, costly decisions later. For instance, it can make sense to set up one distribution plan for one heir and a different plan for another based on their life circumstances or ability to handle money. Some people delay planning because they mistakenly believe they are too young or don’t have enough assets to need one. In reality, any significant asset warrants a plan, and an effective plan is not a set-and-forget exercise. Laws change, families change, and your own wishes evolve, so you should review your plan every five years or so. Those discussions help you confirm that your executor or healthcare proxy still makes sense and adjust for new circumstances, whether it’s a change in family dynamics or the passing of someone you named. The process to create and implement an estate plan can take anywhere from 30 to 90 days, depending on complexity.

Beneficiary Designations and Tax Considerations

Some assume naming beneficiaries on accounts⁷ or using transfer-on-death deeds⁸ is enough. But those tools generally do not provide the same level of control or protection features that may be available through certain trust structures. Transfer-on-death deeds must meet strict state requirements or they can fail. If you later update your trust or will without revising those designations, conflicting instructions can send your family back to probate. Debt on real estate can be another complicating factor.⁹ While these shortcuts might avoid probate, they offer no guardrails for heirs and may prove to be a big headache.

The four key documents discussed above do not address taxes. There are several strategies that may help reduce estate tax exposure and help ensure your assets pass to the people and organizations important to you instead of to the government. If your combined net worth exceeds the current federal exemption (about $30 million for a married couple¹⁰), you’ll need advanced strategies and discussions with an advisor.

Ultimately, estate planning is similar to building a house. Without a solid blueprint and foundation laid out at the start, you end up patching leaky roofs, fixing broken plumbing, and wrestling with sticking doors. By working with your advisor upfront to identify and coordinate planning strategies consistent with your wishes, you can help your family work toward financial well-being with an estate “house” that helps weather the changes life brings.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment or tax advice from Savant. Please consult your investment or tax professional regarding your unique situation.

Sources:

1. Investopedia (7/30/24) – Probate Court: Definition and What Goes Through Probate
2. NerdWallet (3/7/24) – What Is a Pour-Over Will and How Does It Work?
3. Consumer Financial Protection Bureau (5/14/24) – What is a revocable living trust?
4. Nolo (2/8/23) – Durable Financial Power of Attorney: How It Works
5. National Institute on Aging (data as of 6/3/25) – Choosing A Health Care Proxy
6. Everything Probate (9/1/24) – Expected Fees and Costs to Probate
7. Business Insider (7/23/24) – Understanding Bank Account Beneficiaries
8. NerdWallet (6/19/24) – Transfer on Death Deed: Overview and Guide
9. The Wall Street Journal (5/10/25) – When Leaving the House to Your Heirs Backfires
10. IRS.gov – What’s New – Estate and Gift Tax