Common estate planning misconceptions have resulted in numerous myths that have been passed down from generation to generation. Unfortunately, these myths have led people to inaccurately believe that an estate plan is unnecessary.
By busting these myths and informing people of the importance of such planning, individuals can finally embrace and appreciate the need of estate planning for generations to come.
Myth 1: “I’m not old enough for estate planning.”
You do not need to have reached a certain age after becoming a legal adult before you create an estate plan. Though your goals and concerns will likely change as you age and accumulate more assets, you can adjust your estate plan as these changes occur. Many of us have a tendency to procrastinate, and by the time we might need an estate plan in place, it might be too late.
Myth 2: “Estate planning is just for the wealthy.”
Estate planning is for everyone. Whether you own property, have children, have liquid assets, support loved ones who are dependent on your assistance, etc., you should have an estate plan in place regardless of the value or size of the estate, marital status, or your age.
Truth is, estate planning involves more than just the distribution of your net worth. More than just liquid assets make up your estate. Existing inventory in a self-owned business or personal tangibles – such as jewelry, collections, vehicles and furniture – are often disputed among family members after the death of a loved one.
Myth 3: “Estates matter only when you die.”
Estate planning is not just about distributing your assets upon your death – it’s also about planning for your lifetime. In fact, planning for your future incapacity is a major area of importance in any well-crafted estate plan. A permanent disability or incapacity can leave people and property vulnerable when no estate plan or advance directives exist, potentially leading to costly expenses for your family.
Myth 4: “I don’t have to worry about probate because I have a will.”
A will allows you to name a personal representative, aka executor, who will be appointed to oversee your estate’s distribution. However, there are certain assets that might not be controlled by the terms of your will.
Assets such as life insurance policies or retirement accounts might not be controlled by the will’s terms, and therefore might not be protected for your beneficiaries as you possibly intended for in your will.
Myth 5: “My immediate family will quickly receive my assets even if I don’t have a will.”
Wrong! If you pass without a will, South Carolina (or the state you live in) will apply its probate laws of intestacy to determine who will inherit from your estate. While some jointly owned property typically passes to the other surviving owner(s) without going through the probate process, other assets might be unavailable to your spouse or family members during the probate process – or may even be distributed to unintended beneficiaries.
Consulting with a qualified elder law attorney can help avoid costly mistakes and protect the interest of both you and the ones you love.
Jada L. Gaines is an associate attorney with Elder Law & Estate Planning Center in Bluffton. hiltonheadelderlaw.com