If you’re like most people, estate planning isn’t something you think about until someone else brings it up. But if that person doesn’t know what they’re talking about, the reality of an estate plan can seem daunting. Fortunately for you, we’re here to set the record straight on the most common myths about estate planning. This way you can make informed decisions about how your assets for after your death (or incapacity).
Let’s see some examples of myths and misconceptions.
"Only rich people need to plan their estates"
You could be the poorest person in the world, but if you have children or a small business, you need estate planning. The same applies even if you just have a tiny home and/or assets to leave behind when you pass on.
The truth is that estate planning is for everyone. Even if your name isn’t Rockefeller or Gates and your bank account isn’t overflowing with cash. Let’s be honest: without proper planning your assets could get tied up in probate court for years after you’re gone. That’s why it’s important to take stock of what kind of legacy you want to leave behind. That includes instructions on how can people best handle that legacy after your death.
"If you die without a will, all of your possessions will go to the state"
If you die without a will, the laws of your state will define your estate’s division and distribution. But this does not mean that the state itself will inherit you. You may like the way they distribute your assets or that might not be what you want. This can make things difficult for loved ones who are trying to figure out where their inheritance should go based. Having a last will makes sure that your wishes are loud and clear even from beyond the grave.
"Estate Planning is only for older people at the end of their lives"
Consider this: estate planning is not just about your death, it’s about your life. It’s also not just for older people nearing the end of their lives. Estate planning is about protecting yourself, your family and your assets in the event of a disability or illness. It’s good to have control over how you want things to happen. Especially when you can’t make decisions for yourself (e.g., due to incapacity).
"Last wills are the only way to pass on your assets"
It’s true that a will is the most common way to pass on your assets. But there are other ways to do it.
For instance, trusts are another valid method of distributing your wealth after you pass away. A trust is a legal document that allows someone to manage and distribute money or property. That’s always for the benefit of another person. You can use trusts in combination with wills to ensure that everything goes according to plan. Just keep in mind that this will require more paperwork than just signing one document!
"I need a lawyer for everything"
You don’t need a lawyer for everything. Remember that you can choose how much of your estate plan you want to handle on your own. Keep also in mind that you decide how much you want to delegate to a professional.
If your situation is relatively straightforward, Myend can also walk you through all the important steps in creating an estate plan. From naming beneficiaries and guardians for children to stipulating who gets what when they pass away, we include it all. We also provide templates that let you fill in the blanks yourself. You can create additional documents like a unique memory lane.
Other documents you can often prepare yourself include power of attorney, living wills and health care directives. You may just need to ask a lawyer to review the documents after you prepare them. That is probably going to be cheaper than asking them to draft documents from scratch.
"Probate is not going to be a problem if I have a will"
Probate is the legal process in which a court determines an estate’s value. After that, it transfers assets to their correct beneficiaries. It happens even if you have a will, so probate isn’t something that people can avoid just by having one. It would be easier if your estate is small enough. Then it usually doesn’t require court supervision.
Probate takes time. There’s no getting around this fact. It takes several months before an executor can begin distributing assets according to the terms of your last will. There may be additional delays if someone challenges your will or any other aspect of your estate plan.
"If I have a trust I can avoid probate"
Do you have an up-to-date trust that reflects the current value of your assets? Then yes, a trust might help you avoid probate. But it’s important to note that trusts are not foolproof.
Let’s say, for example, that any of the beneficiaries of your estate pass away before you do. Additionally, you haven’t included any instructions for the case that the they die before you. In this case, their assets may still be subject to probate. This means that the rest of your assets could bypass probate through the use of a living trust or other property planning tool. However, any property for deceased beneficiaries could still have to go through probate.
"The government doesn't collect taxes from an estate after death"
The federal government might not always collect high taxes from an estate after death.
The federal estate tax is only applied to estates worth more than a certain amount. However, depending on your state that may be much lower than what you expect. Additionally, it’s important to note that this only applies to estates in which an individual has died. To find out whether or not an estate would need to pay any taxes, consult with a local attorney. Alternatively, make informed decisions after a thorough online search.
The truth is, there are many myths about estate planning and probate. These might keep you from doing what’s best for your family. There are also many misconceptions about how expensive the process can be and how long it takes. Preparing ahead of time is key. There are ways to avoid unnecessary expenses and time-consuming paperwork. And getting familiar with these common myths about estate planning is a great start.
Myend offers the perfect estate and end-of-life planning for all! This way navigating such complicated issues gets easier. Have a look here to learn more. And if you’re ready for action, sign up today for your free account! The estate planning of the future is here today.