Moving forward with an estate plan requires us to face the fact that we will not live forever. This very thought stops many people in their tracks. Others may have heard some common myths about estate planning that is keeping them from seeing a qualified attorney to discuss how an estate plan could help them secure their family’s future. We have compiled the 3 most common estate plan myths to help clarify the benefits of estate planning.
ONLY THE RICH NEED AN ESTATE PLAN
When we hear about estate planning on the news or read about it on the internet, it is usually regarding a wealthy businessperson or celebrity who had no estate plan, made an error in their estate plan, or has family members who are angry about the actual plan. The topic catches people’s attention. Rich people have so much that, surely, they need an estate plan and can afford to have it done correctly. By comparison, when the average person thinks about their own planning needs, they assume that their possessions are not worth enough to necessitate an actual estate plan.
But this thinking could not be further from the truth. Estate planning is about more than just money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated and someone must make decisions on your behalf—a far more likely scenario. If you do not have an estate plan, the court will have to appoint someone to make your medical and financial decisions for you. The process can be very time-consuming, expensive, and can wreak havoc on a family if they disagree about who should be appointed and how decisions should be made.
Even if your means are modest, you should consider who gets your hard-earned savings when you die. If you have no plan, state law will decide who gets what, and many times, the government’s best guess as to what you would have wanted is contrary to your actual desires. But because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in.
I Don’t Have to Plan Because My Spouse Will
For many married couples, jointly owning property and bank accounts is common. If a couple owns accounts or property jointly or as tenants by the entirety, when one spouse dies, the surviving spouse automatically becomes the sole owner. In many cases, married individuals prefer this outcome.
However, this approach can be dangerous. While it is convenient for money and property to pass automatically to a surviving spouse, outright distribution offers no protection. What happens if, after you die, your spouse remarries? If the brokerage account you owned jointly becomes solely your spouse’s, they can now spend it all in any way they want with no consideration for either your wishes or the next generation.
Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and proactively plan what happens to your joint property and accounts when either of you dies, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.
A Will Avoids Probate
Many people believe that, once they have created a will, whether drafted by an experienced attorney or by using a do-it-yourself solution or online form, they have avoided probate. Unfortunately, they are wrong.
While a will is an effective way to designate a person to wind up your affairs after you have passed, determine who will get your hard-earned savings and property, and, if necessary, appoint a guardian to care for your minor children, a will must be submitted to the probate court to begin the process of distributing your money and property. The level of the probate court’s involvement can vary depending on the circumstances, but because the will becomes a matter of public record, the process is not private.
We are here to answer any questions you may have about estate planning, the estate planning process, or probate. Together, we can craft a one-of-a-kind plan to ensure that you and your family are properly protected.