Estate Planning is an important tool that enables you to direct how your assets will be handled upon your death or disability.
At the Singh Law Firm, our attorneys ensure that each of our clients leave with a well-crafted estate plan. Our personalized and effective estate planning ensures you and your family will have the necessary tools and guidance to avoid the hassles of probate, guardianship, conservatorship, or unpleasant estate tax surprises.
Many individuals elect to delay their estate planning because they have fallen victim to several estate planning myths and misconceptions. Continue reading to better understand common estate planning myths.
1. Estate planning is only for the wealthy.
If you answer yes to any one of these four questions, you need an estate plan in place:
1. Do you have children?
2. Do you own any real estate in the United States?
3. Do you have assets with a combined value of $150,000.00 or more?
4. Do you want to save in Estate Taxes upon death?
It is untrue that only the wealthy need to plan their estates. All adults should plan for incapacity and death regardless of the value of their estate. It is for everyone!
2. I am too young for estate planning.
We never know when we might need estate planning and by then, it will be too late. Every year the news headlines at least one celebrity who died before doing their estate planning—many of them at a young age.
None of us know exactly when we will pass or become incapacitated. All adults should have a nominated legal representative to handle financial and medical care decisions in the event of incapacity or death. Failure to do so often results in stress and an emotional burden for your family.
Starting your estate planning young and keeping it updated will keep your assets free from legal complications.
3. All I need is a simple will.
A common misconception among individuals is that a will is sufficient to dispose of an estate and avoid probate. This is only true if you don’t own any real property and the value of your personal assets is less than $150,000.00. Otherwise, if you only have a will upon your death, your estate has to go through a court procedure called Probate. Probate takes significant time and money. In addition, if you have real estate in more than one state, each property may have to go through probate in its respective state. The solution to bypassing probate is to have a properly funded Living Trust.
A will takes effect when you pass and states what should happen to your property after death. However, a will doesn’t instruct on what should happen in matters that can arise before you pass, such as incapacity. A full estate plan will ensure your assets pass according to your wishes and include provisions caring for minor children, a surviving spouse and pets. It also ensures your finances are taken care of if you’re incapacitated and that your health care decisions are carried out the way you’d like if you are unable to make them. Lastly, a well-crafted estate plan and proper upkeep of it will avoid probate not a simple will alone.
4. A revocable living trust is a tool for asset protection.
There are many different ways to protect your assets from frivolous lawsuits but estate planning is not one of those ways. A revocable living trust does not shield your assets from lawsuits or business risks. By planning your estate you are ensuring that your assets pass to your beneficiaries without legal complication and that your final wishes are followed.
A starting point in protecting your assets is to look into auto insurance and homeowner’s liability insurance. Other ways are more complex and you should consult with an attorney and tax professional.
5. I should keep my will and other documents in my safe deposit box.
Although safe and secure, the safe deposit box is not the right place to store your estate planning documents.
When a crisis hits and your family needs the documents, odds are that the bank won’t be open at that hour of the night and your family might not know where the safe deposit box is located. Safe deposit boxes become sealed when the owner dies and the bank will need to see your estate planning documents before anyone is granted access. These documents are of little value if they are locked away and out of reach.
The best place for your estate planning documents is a place where your family knows they are and a location that is quickly accessible.
6. My estate plan is complete upon its creation.
Estate planning is an on-going process. On occasion, final drafts of documents remain unsigned or the signed documents lack coordination with the assets of the estate. It is important to make sure all assets are properly titled and beneficiary designations are in effect.
Changes in family circumstances (marital, birth of child, health, economic) often require revisions to your documents. We recommend reviewing your completed estate plan at a regular frequency to ensure that your legacy will pass in accordance with your wishes and that your beneficiaries receive their benefits without complication.
Now that you have a better understanding on why everyone needs an estate plan, don’t delay your estate planning another day. The time to do your estate planning is now—before it is too late!