People are often misunderstanding the law and misinterpreting it for others. Because of this, the internet is full of misinformation about estate planning.
To ensure you’re not making a mistake when planning your estate, you may need to consider the following:
Myth 1: You don’t need an estate plan until later in life
Truth: As a young adult, you may not believe you need an estate plan. Perhaps it’s because you don’t have nearly enough assets to distribute as you wish. Or, it’s because you’re waiting until your children are old enough to inherit from you.
However, an estate plan may benefit you for two reasons. One, you can name a child guardian who would raise your child if you suddenly suffered a fatal injury or illness and can’t raise them yourself. Two, you can name a power of attorney who would act on your behalf and manage your medical and financial decisions if you’re incapacitated after an accident or medical illness.
Myth 2: Trusts are only for the rich
Truth: A trust ensures an heir inherits assets and can avoid probate and estate taxes. This can sound like something only wealthy people need. So, you may think a will is better to make.
However, a trust can also be used to determine how a beneficiary inherits their assets. In other words, you may have a term in a trust that states, for example, your child can only use their inheritance to go to college. What this means is that you can have some say as to how your assets are used after you pass away.
Myth 3: It’s better to die without a will
Truth: Unfortunately, many people die without a will. This is called dying “intestate.” Some people think this will allow their estate to avoid probate, but it just actually makes the process longer. When this happens, the state will step in to distribute assets according to the schedule set by law.
Myth 4: You don’t need legal help to create an estate plan
Truth: Estate planning is a complex legal endeavor. You may not know all of your legal options or how best to accomplish your goals. You can reach out for legal help when making an estate plan to make sure that everything is clear, correct and does what you want.