Estate planning is important for any adult, no matter your age or health. Taking steps to plan your estate now will help ensure your family, property, and finances are taken care of after you die.
Unfortunately, misconceptions about estate planning often hinder people from taking care of their affairs. Here are three of the most common misconceptions about estate planning and what you really need to know:
I’m not wealthy, so I don’t need a will.
Truth: Everyone needs a will, no matter the value of your estate. In your will, you can direct a person (or persons) as your legal representative(s) to carry out your wishes and designate who will receive your property and assets (no matter the value) upon your death. A will must pass through probate. In other words, a court will oversee the administration of your will and ensure that it is carried out the way you wanted. As such, a will becomes public record. A will also allows you to predetermine who will take care of your kids—this is the primary reason even young adults who have children should have a will. If you die without a will, it can be very costly to your family and heirs, and you will have no say over the division of your assets. State heirship laws take over.
For more on wills, read our blog: 5 Reasons Everyone Needs a Will
I don’t have wealth to leave my children, so I do not need to set up a trust.
Truth: If you have children, consider a trust. A trust is often used when dealing with minors. If you have a trust, you can ensure that any assets left behind for your children are not used or spent by someone else. Trusts can also be beneficial if you are leaving money to someone who may not be mature enough to handle it appropriately. Finally, trusts can also reduce the taxes your heirs might otherwise have to pay and provide greater protection of your assets from creditors and lawsuits.
I don’t need to discuss my estate plans with my family.
Truth: Taking time to discuss your estate plans with your heirs can help prevent confusion or disputes down the road. Family conflicts are unfortunately common when dealing with a loved one’s estate, but by planning ahead, you can help reduce or eliminate any potential arguments among your family and children after you die.
Navigating the estate planning process can be stressful and confusing, but an experienced wills and trusts attorney can help you plan your estate and guide you through the process. An attorney will explain the legal terms and help ensure that your will or trust is prepared properly so there are no questions in the event of your death. Your attorney can also help review your financial assets and verify who can receive what from your retirement accounts.
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