In 1906, Italian economist Vilfredo Pareto observed that 80% of the wealth in Italy at the time was held by 20% of the citizenry. Since that time, thought-leaders from various disciplines have picked up on the “Pareto principle,” or the 80/20 rule. The 80/20 rule is often reframed to clarify that we usually get 80% of the results from 20% of the work we do. Estate planning is no exception. While there are a nearly infinite number of ways that a good estate planner (like wh Law | We Help) can plan for every remote contingency, the simple fact remains: you get most of your estate planning bang-for-your-buck with a few simple devices.
Over at the Wills, Trusts, and Estates Prof Blog, Professor Gerry Beyer recently wrote a short blog that identified what you might think of as the “20%” of one’s estate plan—the few things that anyone can do to make sure most of his or her estate planning issues are in good shape.
Here are the five things that Professor Beyer identified:
2. Draft a power of attorney.
3. Get a health care power of attorney and living will.
4. Update your beneficiary designations.
5. Talk to your family members to make sure that their documents are in order.
These are five simple things that any person can to do make sure that he or she has made adequate plans for an estate. Are these enough?—maybe and maybe not, depending on the estate. But they are a good start for anyone, whether the estate has $1,000 or $1 million in it.