Estate planning can be an intimidating subject. After all, it involves making arrangements for the distribution of your assets after your death. It is an important part of financial planning for everyone, regardless of age or wealth. However, there are many myths and misconceptions about estate planning that can prevent people from taking the necessary steps to protect their loved ones. We want to debunk some of these common myths and misconceptions so you can begin your own estate planning process with a clear idea of what to expect along the way.
Myth: Estate planning is only for the wealthy.
Reality: Estate planning is for everyone, regardless of the size of their estate. Even if you don’t have a lot of money or other assets, you still want to make sure that your assets are distributed according to your wishes and that your loved ones are taken care of. For example, the primary residence is often one of the largest assets people have to pass down to the next generation. Do you know who you want to get your house when you die? Do you know how it’s going to be transferred to them? These are important questions for everyone to consider. Even if you aren’t a homeowner, assets like bank accounts and vehicles will need to be distributed after death.
Myth: Estate planning is complicated and expensive.
Reality: Estate planning can be as simple or as complex as you need it to be. We offer a range of different estate planning packages. This could be as simple as a basic will and powers of attorney, or as complex as a living trust with powers of attorney and a deed transferring your home to your trust. Even within a trust, we can design it to be as simple or as complex as you’d like. No matter which option you choose, we walk you through every step of the process, explaining the important details along the way, all for one flat fee rather than an hourly bill.
Myth: I don’t need an attorney to help me with estate planning.
Reality: Hiring an attorney can be a valuable asset when it comes to estate planning. We can help you understand your options, draft the necessary documents, and ensure that your estate plan is valid and enforceable. Too often we have clients come to us after trying to DIY their estate plan using a cheap online service that cuts corners. They could have saved more money in the long term if they had come to us from the start. Like most things in life, estate planning is very much “you get what you pay for.” As the old saying goes, cheapest is seldom the least expensive. Hiring an attorney is a larger up-front cost, but it saves time and money in the future.
Myth: A will is all I need for estate planning.
Reality: A will is an important part of estate planning, but it is not the only document you may need. When thinking about estate planning, people often only focus on what happens after death. In reality, a good estate plan also helps you plan for incapacity during your lifetime. In these scenarios, a financial power of attorney and healthcare directives are indispensable. Even after death, a living trust may suit your needs better than a simple will if you would like your loved ones to be able to bypass the probate process.
Myth: My estate plan is complete once I create my will or trust.
Reality: Your estate plan is a living document that should be reviewed and updated regularly to reflect your changing circumstances. It is a good idea to update your estate plan at least every five years, or more often if you have experienced a major life event, such as a marriage or divorce, moving to another state, or the birth of a child. Also, it is important to update your beneficiary designations after creating your estate plan to make sure everything is working in harmony. Beneficiary designations trump whatever is in your will, so updating them is crucial.
Estate planning is an important part of financial planning for everyone. By debunking common myths and misconceptions, our goal is to encourage more people to take the necessary steps to protect their assets and their loved ones. Going into the estate planning process with clear expectations makes it easier for everyone involved. If you’re ready to take the first step with creating your own estate plan, schedule a free 30 minute consultation with us today!