Oftentimes, people put off creating an estate plan because they believe it doesn’t apply to them. Here are a few common estate planning myths that may have you reconsider:
Estate Planning is for the “older” folks. I’m too young to think about this.
No one is too young to consider estate planning. Anyone owning a home should consider an estate plan to avoid the expenses and delay of probate. Also, if you have children, a will, at a minimum, is necessary to select your guardians for your children. Otherwise, the court will decide and he or she may not be your choice. Incapacity or death can come unexpectedly and you will want to ensure that your property and your loved ones are protected. Estate planning is for anyone who becomes incapacitated or passes away. In other words, estate planning is for everyone.
Estate Planning is for the rich.
No matter how large or how small your estate, estate planning is crucial for everyone. The magic number in California is $150,000. If you leave assets worth $150,000 or more and you do not have the proper estate plan, your estate may be subject to probate, which is costly, time-consuming and public. In addition, estate planning is much more than dealing with money. If you become seriously ill, how will your finances be taken care of? Or will your health care decisions be carried out the way you like? Will your children be taken care of by the right guardian? With the proper estate plan, you can provide detailed instructions on how to distribute your assets and who will receive your estate in what manner and when. And you can also be specific on how to provide for your own care and your loved ones in the event of your mental disability.
I have a Will so I’m all set.
Having just a Will may be a good start, but may not be enough. Wills do not offer any planning for you or your loved ones in the event of your mental incapacity; it only provides instructions on your death. The other downside of having just a Will is that if your estate is subject to probate, it will be fully public and anyone can inspect and know about your affairs.
If I have a Will, my estate won’t go through the probate process.
Having property that transfers by a will guarantees the probate process. The probate court will oversee the distribution of a person’s estate as outlined in the decedent’s will.
I’ve already created an estate plan so I don’t need to do anything else.
Many people believe that once their estate plan is complete, they can check it off their checklist and don’t have to think about it anymore. But what they wanted to accomplish then may no longer be appropriate. For example, there may be changes in their personal, family or financial situation. Or there could be changes in the tax laws that would affect the estate plan. The cost of failing to review and update may have far more significant consequences than the cost of keeping the plan current.
About the Author
Christine Chung, Esq.