When it comes to estate planning, there are many myths and misconceptions that people consider as truth. It is imperative to recognize these untruths to avoid leaving your loved ones with financial and legal obstacles to overcome when you’re gone.
The following are the five most common myths and misconceptions about estate planning:
- Estate planning is only for the wealthy – This is the most common reason why most people think they don’t need an estate plan. Although you may not be Jeff Bezos or Oprah Winfrey, you may have accumulated some assets which require a solid estate plan to determine how the property you’ve gained during the course of your life will be distributed to your family members when you pass away. No matter how much (or how little) property you have, you need an estate plan.
- I’m too young to worry about estate planning – Life is full of surprises, even some unfortunate ones. The truth is, it doesn’t matter how old we are or how much of an estate we have, creating a plan at a young age is the best thing you can do for yourself and your loved ones.
- If I have a will, I don’t have to worry about probate – Another common misconception, a will doesn’t help your family avoid the long and expensive process of probate. While a last will and testament can prevent the state from handling the distribution of your property, it does nothing to help you avoid probate altogether. This is the only way for a court to decide if your will is legally valid, as well as the only way to ensure that the decisions you made in your will are enforced. However, a good revocable living trust can help you minimize or avoid probate.
- Preparing an estate plan will be costly – While it may be true for those who have a complex estate, an estate plan for most people consists of important documents (i.e. a law will and testament, financial power of attorney, medical power of attorney, a living will, and a revocable living trust). Most people can prepare these documents themselves.
- I don’t need a lawyer – Although you can draft many of these documents yourself at little to no cost, it is a good idea to—at least—run these documents by a qualified estate planning attorney, which is less expensive than having a lawyer draft them all from scratch.
Of course, estate planning is not something that many people want to discuss. Yet, it is critical to your life plan. A well-thought-out estate plan will ensure that your loved ones have what they need when you die.