Dispelling Estate Planning Myths
Jan. 24, 2023
Most people put off estate planning for as long as possible. Survey after survey indicates that the percentage of Americans who have even created a last will and testament hovers around 40 percent. Even the pandemic, with its daily reports of thousands of deaths, barely moved the needle, according to the yearly survey done by Caring.com.
A lot of people harbor myths and misunderstandings about estate planning. When they hear the word estate, many people figure estate planning is something that only the wealthy need be concerned about – those living in mansions behind gates and the like. People also equate the process with just determining what happens when you die – who gets what.
However, not only is estate planning not just for the rich, but it is also far more encompassing than merely designating who gets what after you pass on. A comprehensive estate plan puts legal instruments in place for your own future in terms of designating others to make important financial and healthcare decisions for you should you become incapacitated.
Throughout the years, The Elder & Disability Law Firm, APC has helped people of all ages create focused and all-encompassing estate plans. The attorneys here have encountered a variety of different misinterpretations and even downright myths about what estate planning is and is not. Some of those misconceptions are explained below.
For all your estate planning needs in or around Redlands, California, or nearby in Rancho Cucamonga, Palm Springs, or Riverside, contact us today at The Elder & Disability Law Firm, APC, regardless of your age or status in life. We’re here to help all.
Common Misconceptions About Estate Planning
Estate planning isn’t necessary until you retire: This may be true if you could predict the future and you know there will be no challenges on your path toward retirement, either health-wise or financially. In addition to a will or trust to designate the beneficiaries-to-be of your assets, you also need to execute a power of attorney to designate someone to take charge of your finances should you become incapacitated or for the times when you are just unable to do so yourself.
You also need to create an advance healthcare directive, which not only names someone to voice your medical treatment choices should you be unable to do so, but also lists what those treatment choices are. Neither of the people you name needs to be an attorney, usually just a family member or trusted friend, but if you become incapacitated, they will play an important role for you and your loved ones.
I don’t have enough assets to necessitate an estate plan: Even if you’re just getting by, as the saying goes, you still need to take into account the unexpected when it comes to managing your personal affairs when you can no longer do so yourself. Also, though you may feel your assets are not that great yet, you still need to execute at least a will to prevent the government from making decisions on who gets what when you die. If you die intestate (without a will), the courts will choose who your beneficiaries are. You don’t want to put your loved ones through that.
Using an online form is just as effective as consulting with an attorney: We probably all have seen ads on television and online promoting services where, for a set fee, you can create a will or trust. These services offer standardized documents where all you do is check off a few boxes and type in a few names, and voilà – you’ve created an estate plan.
While you may be able to cover the basics using this online approach, it’s what you overlook or don’t understand that can create problems for both you and your loved ones going forward. You really need to sit with a professional estate planning attorney to make sure you cover all eventualities in life. An online, do-it-yourself form cannot help you go through the self-analysis you need to make sure your plan is focused and comprehensive. Plus, your estate plan needs periodic reviews and updating. This is not something an online resource facilitates.
If I don’t leave a will, my family will decide who gets what: As discussed earlier, if you pass on without a will, a probate court overseeing the administration of your estate – the assets you leave behind – will use what is called the law of intestate succession to determine your beneficiaries. The court will break up your estate into fractions or percentages and use that calculation to award beneficiaries, starting with your spouse and children. You don’t want to put your loved ones through that process.
If I leave a will, my assets won’t have to go through probate: Wrong. Wills must always go through probate court proceedings. The court wants to make sure all your debts and obligations are honored before your loved ones get what you designate for them.
The only way to avoid probate court is by creating a living trust, which is administered outside of probate proceedings. This is another solid reason why you need to confer with an experienced attorney when you set about to plan your estate. Avoiding probate saves your loved ones a lot of time and emotional stress.
I created an estate plan years ago, so I’m all set: All estate plans should be periodically reviewed and updated. Circumstances in your life change. You may acquire new assets or sell off older ones. Your family structure may change, especially if you divorce or remarry. You may even change your opinion about who should get what. You may have gone through a health or financial crisis and realized you need stronger legal protections in place. Life is never static, so neither should your estate planning documents.
Speak With an Experienced Attorney
The above are just a handful of the many misconceptions people hold about estate planning. We’ve all heard the expression that “the devil is in the details,” and when it comes to estate planning, details matter a lot. You want to make sure you cover every possible eventuality or challenge that life may throw you.
For all your estate planning needs and concerns in and around Redlands, California, reach out today to The Elder & Disability Law Firm, APC. We provide personalized service and attention to your unique needs in life.