The following five myths continually frustrate estate planners. This is not only because we know that not only are they patently untrue, but because their continued circulation can be actually be harmful to your family and your estate.
1. Estate Planning is only for rich people. This is probably the single most common estate planning myth there is—and it is a myth. If you were to add up the value of your home, your life insurance, savings, retirement account, etc., etc., etc. you will likely find that you are much closer to being a “rich person” than you thought. Not only this, but as we’ll get into in more detail below, estate planning is not only about saving on estate taxes, it’s also about controlling your wealth and protecting your own needs when the unexpected occurs.
2. “I have plenty of time.” (AKA: Only old people need estate plans.) First of all, just because you’re young doesn’t mean bad things can’t happen to you. Unexpected tragedies aside, an estate plan is useful even when you’re young because an estate plan is not just about death. A good estate plan will include not only a will, but also a healthcare directive and HIPAA Authorization (both of which are useful if you find yourself facing a surprise stay in the hospital), Power of Attorney documents (which you may need if you ever travel outside the country or are otherwise unable to sign for yourself on financial or legal documents), and legal documents relating to minor children (such as medical authorizations—an essential document if you leave your minor child with a babysitter for any extended period of time.)
3. Married people don’t need estate plans. You may think you don’t need an estate plan because under normal circumstances, any jointly held property will pass automatically to your surviving spouse… But what happens if your surviving spouse gets re-married? What about the property you would specifically like to go to your children, or to your parents or siblings? And what if both you and your spouse die together? These are the reasons why even married people should consider drawing up a simple plan.
4. All I need is a quick will and I’m done. A quick will is certainly better than no will. But there is a saying that “anything worth doing is worth doing well,” and we believe that this goes for wills (or any other legal document) as well. If you want the basics you can have the basics. But if you want the best, you’re going to need to spend a little more time on it.
5. Estate Planning is only about money. While money is one of the main motivating factors behind the creation of an estate plan, money is absolutely not what estate planning is all about. Estate planning is about people. It’s about your family and doing what’s right for them. A well thought-out will or trust saves them from a lengthy probate process, and reassures siblings that they are doing what mom or dad really would have wanted. An estate plan is full of documents designed not just to save you or your heirs money, but to allow you to express your wishes and values even after your death. Estate Planning is about more than just money—it’s about family, legacy, and love.