Myth: Estate Planning is Only for the Rich
Truth 1: Small Assets Matter
Homes, small businesses, and stock market investments are among the many assets that family members may be due to inherit after you pass. Even if you feel that these assets are not worth a lot, having an estate plan can help reduce infighting between family members over who gets what. Without such a plan, everything will be determined in accordance with your state’s inheritance laws.
Truth 2: Estate Planning Helps Take Care of Those Most Vulnerable After Your Death
Do you have an elderly parent who needs a caretaker? Young children? Perhaps even a beloved household pet? With careful estate planning, you can establish a special trust fund to make sure those who you care most about are provided for after you pass.
Myth: Estate Planning Only Involves Managing Financial Assets
Truth: Estate Planning Protects Your Vision for the Future
Estate planning goes well beyond just managing where your money goes. For example, in the event that you become incapacitated, or diagnosed with a disorder such as Alzheimer’s or dementia, an estate plan allows you to pre-select someone to make medical decisions for you. In addition, estate planning can also help protect families with young children. If you pass before your child turns 18, you can choose who will get guardianship of your children. And if your spouse remarries, you can take measures to protect the rights of your children to share an estate.
Myth: I’m Too Young to Begin Estate Planning
Truth: People in their 40s, 30s, or even 20s Might Find Estate Planning to Be Useful
Unfortunately, you cannot predict whether you’ll be involved in an accident, or when your time will be up. Therefore, even if you are in your twenties, estate planning may be useful for you. In fact, as discussed above, those with young children should especially consider estate planning.
Myth: My Spouse Will Automatically Inherit Everything
Truth: You Need to Consider Scenarios
What happens if you outlive your spouse, your spouse remarries, or you both pass together? Do you want to guarantee certain assets for your children or siblings? Estate planning will help you manage potential situations such as these.
Myth: Everything Will Be Covered in My Will
Truth 1: Wills Require Probate
Under probate, your family has to go to court. This could potentially lead to expensive attorney’s fees and years of infighting between family members, delaying your family from receiving any money or assets they may desperately need.
Truth 2: Estate Planning Can Help Reduce Federal and State Taxes on Your Inheritance
Being married, leaving assets to your grandchildren, and removing certain assets from your estate are among the many ways you can help reduce taxes. With careful estate planning, you can thus prevent your beneficiaries from overpaying on taxes.
Truth 3: Wills Only Offer Planning in Case of Your Death
In the event you are diagnosed with a neurological disorder or mental disability or are involved in an accident, a will cannot offer your family guidance, whereas an estate plan can.