Are you on the fence about estate planning? Does it seem like something that’s distant or a task for the future? You’re not alone. Many people put off estate planning or fail to complete it altogether. But estate planning is essential to both ensuring that your physical and financial assets are distributed the way YOU want and to communicating your medical care preferences if you become incapacitated.
So, the question is – do you believe any of these 5 myths? And are any of them preventing you from putting together an estate plan that will make your wishes clear to everyone?
DISCLAIMER: Individual circumstances and state laws vary, so only undertake estate planning with the help and assistance of an attorney licensed in your state.
Myth #1: Estate Planning is Only for the Wealthy
There’s no set magic number you need in your bank account to qualify for an estate plan. In reality, everyone has assets, such as a home or vehicle, bank accounts, personal belongings, or even digital accounts.
It does not matter if you have $500 or $50,000 to your name. Your survivors still need to know what to do with your money and belongings after your passing. They also need to know which of your digital accounts to cancel and which to turn into memorial pages.
Your life has more threads than you may think, and with an estate plan, you can provide clear direction for how you want everything taken care of.
Myth #2: Estate Planning is Only for the 65+ Age Group
While it would be wonderful if estate planning were only needed for the 65+ age group, the truth is that life is unpredictable. Most of us have seen a young, vibrant friend or family member pass away long before they reached retirement age.
With illness, accident, or tragedy always a possibility, adults of every age and family situation benefit from outlining their wishes in an estate plan. This is especially true for parents with minor children. An estate plan allows you to designate your preferred guardian and set up a fund that will financially support your children should the worst occur.
Also, young adults often have a larger total debt amount (mortgage, student loans, credit cards, car loans, etc.), and depending on the fine print, these debts may become your family’s responsibility to pay off. However, by speaking with an estate planning attorney, you can identify the best ways to address your debt and hopefully alleviate some of the financial burden left behind.
Myth #3: All I Need is a Legal Will
A legal will is an essential part of any estate plan, but it does not cover the full scope of what a thoughtfully prepared estate plan can cover. A will only discusses what to do after your passing; it does not say what to do if you become incapacitated or unable to make decisions on your own.
For example, if you are placed in a medically induced coma or develop Alzheimer’s, any wishes you’ve stated in the will do not apply because you are still alive. But who should look after your children? Who should pay your monthly bills? These questions can be answered with estate planning documents outside the will.
The most common documents to consider are the financial power of attorney, healthcare power of attorney, living will, and revocable living trust. These forms ensure that your needs and your family are taken care of no matter what circumstances may arise.
Myth #4: Estate Planning is Too Expensive or Time-Consuming
While the process can be intricate, a knowledgeable guide makes everything smoother and easier. You will need to pay some attorney fees, of course, but you will save on future legal fees, taxes, and court costs that often arise if there is no estate plan.
Ask your friend group or call around your area to find an honest, affordable estate planning attorney. You get to choose who you work with, so take your time to find the best fit. You’ll want someone with experience who is transparent about their fees and unfailingly committed to answering your questions and setting up an estate plan focused on your wishes.
Myth #5: My Family Will Sort Everything Out
Even the closest family members can become stressed and overwrought during a time of grief and financial indecision. And unfortunately, informal discussions with family about your wishes don’t hold up in court. If there are no legal documents stating your directives, your estate will go to probate court, and state law will determine what happens to your assets. It won’t matter what you’ve discussed with your family.
But what if your spouse has a power of attorney (POA)? Can’t they take care of everything? The POA is only valid while you are still living. Once you have passed, the will or trust takes over, and the POA becomes obsolete. While your spouse will have rights in the probate court, the POA does not give them any additional power or standing during the proceedings.
To ensure the smoothest transition and prevent any family disagreements, it’s always best to complete a full estate plan with a licensed attorney. You can prevent complications and provide clear guidance to your family and the courts regarding your wishes.
Remember, Estate Planning is an Ongoing Responsibility
Now that the facts have replaced fiction, remember that estate planning is fluid because life is always changing. You may have more children, get divorced or remarried, get promoted and receive a pay increase, or lose a family member who was listed as a beneficiary.
As a rule of thumb, regularly review your estate planning documents every 3-5 years, paying special attention to beneficiaries. There have been unfortunate cases where a former spouse received the inheritance because they were never removed as a beneficiary after the marriage was dissolved.
By keeping tabs on your legal documents, you ensure that everything stays up-to-date and accurately reflects your changing life and priorities.
Pro Tip: Consider Preplanning for Your Funeral Wishes
In addition to putting together an estate plan, you can also complete advance funeral planning. After the death of a loved one, surviving family members must often answer between 100 – 200 questions before any kind of funeral or memorial service can take place.
Pulling together all the answers while grieving a loss can feel overwhelming. That’s why advance funeral planning is such a great idea. Read “10 Reasons to Plan Ahead” and “6 Ways You Can Save Money with Funeral Preplanning & Prefunding” to learn more.
Additional Estate Planning Resources
For more information about estate planning, check out these additional resources. Also, consider making an appointment with a reputable estate planning attorney in your area.
