I have discovered over the years that many people, maybe most, who avoid estate planning are not doing so because they don’t care about their loved ones. They avoid it because they don’t fully understand what estate planning is really all about. Seven of the leading misconceptions about estate planning are as follows.
Misconception #1: Estate planning is only for the rich and famous.
Fact: Estate planning is for anyone who wants to have control over what happens if they become incapacitated or die. Forget the rich and famous; if you have a home, vehicle, bank accounts, retirement accounts, personal belongings, minor children, or other loved ones, estate planning is for YOU! It really is about protecting people, not just your “stuff”.
Misconception #2: A will avoids probate
Fact: A will generally goes through probate—it doesn’t avoid it. A will tells the court your wishes, but probate is often still required to validate the will and oversee distribution of assets. Avoiding probate usually requires additional planning, such as beneficiary designations, jointly owned property, or certain types of trusts (depending on state law).
Misconception #3: I’m too young to need an estate plan
Fact: None of us know what will happen tomorrow; accidents and illnesses can strike at any age. Having documents such as a healthcare power of attorney and financial power of attorney will help your loved ones help you. Otherwise, they might be barred from accessing information on your behalf.
Misconception #4: My spouse automatically gets everything
Fact: Not always. State laws may determine who inherits your property if you die without a will. Plus, things can get very complex for blended families, second marriages, children from previous relationships, and more.
State law may determine who inherits your property if you die without a will, and those laws don’t always match what people expect. Blended families, second marriages, children from previous relationships, and separately owned property can make things much more complicated.
Misconception #5: My family knows what I want; I don’t have to spell it out for them.
Fact: Knowing your wishes and having legal authority are two different things. And frankly, when families learn this, it’s usually too late. Without legal documents, your loved ones may not have the authority to make medical decisions for you, or access your financial accounts, or even carry out your wishes. Best to have it all legally documented.
Misconception #6: Estate planning only kicks in after I die
Fact: No. Estate planning is very much about protecting you while you’re alive. Your estate plan can address who manages your finances if you’re incapacitated, who makes healthcare decisions for you, your preferences for medical treatment (think artificial life support or not), and how your bills will be paid until you’ve recovered.
Not everyone needs a trust, but many middle-income families benefit from one.
Misconception #7: Estate planning is mostly about money
Fact: For many families, the most beneficial elements of an estate plan have nothing to do with wealth. Estate planning can cover things like: who will care for my children, who will make medical decisions for me, how can I ensure my wishes are followed, and how can I make things as easy as possible for my family when I’m gone?
A comprehensive estate plan, customized by an experienced estate planning attorney for you and your loved ones, can reduce uncertainty, minimize family conflict, and provide clear guidance during some of life’s most difficult moments.
I hope this post was helpful and cleared up any misunderstandings you may have had about estate planning. If you have any other questions about estate planning, including how to get started, please feel free to call me at 513-399-7526 or visit www.davidlefton.com for more information.