09 Oct FIVE MISCONCEPTIONS ON ESTATE PLANNING
Estate planning is not simply protecting your assets or having a Will and a power of attorney. It is a plan whereby you are in control of your assets during your lifetime when you are well and to protect you if you should become disabled and have your assets go to the people you want, in the way that you want, when you want when you pass without unnecessary cost or delay in addition to considering tax issues, court costs and attorney’s fees. Everyone is different, so most should have a specific plan considering their own goals.
Five misconceptions about estate planning are as follows:
- All I need is a simple Will?
First, many assets do not even pass by Will. Usually, retirement accounts, life insurance policies, annuities, etc. have beneficiary designations which supersede a Will. That doesn’t mean that a Will is unnecessary. Are you concerned your spouse will remarry giving all of your assets to someone else other than your own family members? Are you concerned you or your loved ones could become disabled? Are you concerned about protection of assets from your creditors or creditors of your beneficiaries? Is a beneficiary a spendthrift, addict, or simply a poor steward over assets? Are you concerned about marital issues of a beneficiary? Are you concerned about tax issues? Do you want to be kept alive even if you have no quality of life? Do you want to give someone power to be in control of your assets if you lack mental capacity? Do you want loved ones to have access to your medical records even after you die due to the privacy laws? Do you want to avoid probate? Do you want your assets to go to your beneficiaries without delay? The list goes on. There are many considerations that should at least be discussed in doing an estate plan that fits your goals.
- I do not need to do a plan until I am older.
Since we are not in control of our own destiny, estate planning should probably be done when someone reaches the age of majority. Disability is not limited to the elderly. If you have children, you need to consider who would be in charge of their assets until an age that you can determine and who would be their guardians.
- If you own no assets, planning is unnecessary.
See the article about Atatiana Jefferson by clicking here. She had no assets, but her family fought over her funeral as she had done no planning. What if you have a retirement account (even if small) and lose mental capacity – you need to give authority to someone you trust to take care of your bills. Do you want to give someone the authority to make medical decisions for you if you can’t make your own? Do you want to be kept alive artificially? Do you want to name the guardian of your children if they are minors?
- I can do my own estate planning.
While this may be true, you usually get for what you paid. You might also be able to do surgery on yourself – but it is not recommended. There are too many legal issues (we have mentioned only a few in this article) that should be considered. At the very least, one should consider discussing their planning with their attorney who does estate planning.
- After I’m finished with my plan, there is never a need to do additional planning.
Laws change, relationships change, assets change and health changes. Sometimes people get divorced, sometimes tax laws change, sometimes state laws change that effect planning, sometimes people get disabled, sometimes people need costly long-term care, sometimes people become estranged, sometimes people get sued, sometimes technology changes, etc. The older you get, the more often your plan should be reviewed. Also, if major events occur, your plan should be reviewed. Although you should plan for certainty and not leave it to destiny, plans should be periodically reviewed.
If interested in learning more, consider attending our next free “Estate Planning Essentials” workshop by calling us at (214) 720-0102 or sign up by clicking here.