Estate Planning Myths

Numerous myths surround estate planning: it’s too expensive, it’s complicated, it’s only for the wealthy. In reality, estate planning is an important step for all families. A proper estate plan ensures that assets pass to the appropriate people upon your death, but also specifies who can assist you during your lifetime. There is no reason that creating an estate plan needs to be difficult. In fact, the average person should have an estate plan and getting one can be easy. Below, we debunk some of the most common myths surrounding estate planning.

Myth #1: Creating an estate plan is only for the wealthy.

Perhaps the most common estate planning myth is that only rich people have an “estate” and need an estate plan. An “estate” refers to anything you own: a house, a car, a bank account, etc. Obviously, almost everyone owns assets and an estate plan is how to specify where those assets should go upon your passing. Additionally, regardless of the value of the assets you own, an estate plan specifies who can help you with your financial and medical decisions if you are to need that type of assistance. You do not need to be wealthy to need an estate plan. If you have assets you want to direct upon your passing, want to specify who has the legal authority to help you if you need assistance, or have children you want taken care of upon your death, you need an estate plan.

Myth #2: A will is all the “estate planning” I need.

When people think of an “estate plan” a Last Will and Testament (or “Will” as it is commonly called) is what comes to mind. While a Will can be an appropriate document for some people, most families can benefit greatly from using a Revocable Trust as the primary document in an estate plan. Most commonly, a Will falls short for families that include minor children—whether those minors are children or grandchildren. A Will does not provide the types of instructions that are important to include when assets may be left for the benefit of minors. An experienced estate planning attorney can help you decide what the best approach would be for your family.

Myth #3: An estate plan is only about money.

Many people think an estate plan is only about directing your money to specific people when you’re gone. An estate plan does address that question, but a complete estate plan would address not just that question, but also questions of who can assist you with management of financial affairs and health care decisions during your lifetime. For some people, these questions are more important. After all, the people who help you with financial or medical decisions during your lifetime will have a direct, and potentially life-altering, impact on your during your lifetime. These lifetime questions are critical for people to answer with a proper estate plan.

Myth #4: If I have a will, my assets will not go through probate.

One of the most common misconceptions is that if you have a will, you and your family will not need to worry about probate. In reality, a will is simply an instruction manual for the probate court. Having a properly executed will does not keep assets out of probate, but is your opportunity to tell the probate court how your assets should be distributed (after those assets have made their way through the probate process). Multiple strategies exist to keep assets out of probate; simple planning now can keep assets out of probate when you’re gone, but do not think that having a will in place will do the job by itself.