Estate planning refers to the process of preparing and arranging (while a person is alive) for the disposal or management of the person’s estate in the event that they die or become incapacitated. Simply put, it means planning in advance and choosing the people or associations you want to benefit from your estate after your death or incapacitation. Estate planning does not always turn out right, as most people make costly mistakes or believe certain myths about estate planning.
Here are seven of the most common misconceptions about estate planning.
Most Common Myths and Mistakes about Estate Planning
1. I am too young to make an estate plan
No one is too young to plan for incapacity or death. Once you’ve attained legal adulthood according to the laws of the state you reside in, you can start making plans for the disbursal of your properties. Accidents and deaths are generally unplanned and often occur at the most inconvenient times. Failure to put an estate plan into place can be disastrous and make things messy for the family you leave behind. Most estate plans are flexible and can be updated over time as situations and living conditions change. As you grow older and make new life choices, you can easily revisit and re-update your estate plan.
2. I don’t have an estate, and I am not wealthy, so I don’t need estate planning.
You don’t need to be very rich or have an actual “estate” before you can draft an estate plan. Estate planning goes beyond allocating money and properties; it is like a written embodiment of yourself. If you have liquid assets, real property, and insurance, or you have loved ones you would like to assist, then you need estate planning. Estate planning ensures the continuous management of your everyday activities in situations where you can no longer do so. In situations like incapacitation, estate planning can help your friends and relatives to make the decisions you would have made about your healthcare. You can plan for basic things like who would take care of your pets or children. So, the fact that you do not currently own much does not stop you from making an estate plan.
3. My spouse/kid will automatically get my properties when I die.
This is one mistake that has been made way too often. Without an estate plan that includes a will in place, all your properties and estate will be distributed according to your state’s intestacy laws. These laws will let a probate court appoint an executor and determine who will take over your properties after your demise. The distribution of your assets and properties would now be left at the mercy of your state’s intestacy law provisions. While your spouse and kids might get the bulk of your estate, other people you care about might end up receiving nothing. Since it is based on the provisions of the law, unrecognized relations like step-children, friends, or unmarried partners might be excluded. Also, the probate process is tedious and generally expensive, especially if you did not make a will.
4. I have made a will, I don’t need an estate plan.
While a Will is part of your estate plan, it might not cover certain parts of your assets. A Will lets you appoint an executor who will be charged with properly distributing your estate, but some assets like life insurance and retirement accounts will bypass the probate process. Also, some other important legal documents differ from Wills that are included in estate plans. Documents like the durable power of attorney, revocable trust, or a living will; are different from normal Wills and are important to protect your interests in unfortunate situations like death or incapacitation.
5. Estate planning is too expensive.
Estate planning does not have to be unnecessarily expensive if you don’t want them to be. Hiring an attorney might cost you a little at first, but it will save you and your loved ones the expensive process of probate eventually. To save money on estate planning, you can ask about local estate planning attorneys in your environment. Some law firms will charge you a flat rate, while some will charge you by the hour. Ultimately, it all boils down to your needs, the types of documents you need, and the rate of the estate planning attorney you hire. You should always schedule a consultation where you can discuss estate planning costs with the attorney. If you hire reputable firms like the Saanichton Law Group, you will be surprised at how affordable estate planning is.
6. My friends and family will not fight over my property.
Unexpected wealth or money can cause unnecessary friction between lots of people. You should never assume that your friends and families would respect your wishes and know what to do with your properties. Most times, unfortunate events like death would leave your family grieving and go through a lot of emotional trauma. On the other hand, a business partner might be scheming and plotting how to have the business to themselves. A legal document like an estate plan would guide the people you leave behind on what to do next and how to do it, thereby avoiding unnecessary embarrassment, conflict, or stress. When you have prepared an estate plan, you will always feel at ease, knowing that you have made provisions for all of your loved ones.
7. Not speaking to a professional
Sure, there have been cases of people implementing DIY estate plans, but these plans rarely scale through legal challenges. It is advisable to consult an experienced estate planning professional before making an estate plan. Estate attorneys understand the law, and they will give you insights into the estate laws operating in your state and also help you with tax-planning tactics. They will ensure you have strong estate plans to handle complex assets and resolve conflicts between your beneficiaries.
Conclusion
Creating an estate plan is often a loving gesture that goes a long way to immortalizing your image with your friends and loved ones. Talk to a qualified estate planning attorney so you can secure the interests of your loved ones the right way. Before creating an estate plan, you should learn the truth about the most common myths associated with estate planning. With the right guidance, creating an estate plan is an effortlessly easy, affordable, and painless process.
To know more about estate planning mistakes and how to avoid them, get in touch with the Saanichton Law Group today. Our team of experienced lawyers will demystify the planning process and create a customized estate plan that protects your property, monies, and loved ones. Call us today at 250.544.0727 to schedule a consultation.
