When it comes to estate planning, there is no shortage of good information available if you know where to look for it. However, there are also several common misconceptions people have that need to be dispelled.
Here are the top four worst assumptions you can make about estate planning:
1. You’re Too Young to Start Thinking About Estate Planning
The reality is that none of us knows when we will need to rely on our estate plans; we don’t know what the future holds in store, whether we may become incapacitated, disabled, or otherwise unable to communicate our wishes. However, according to the American Bar Association, a shocking 55 percent of Americans die without estate planning documents in place. If you are over 18 years old, it’s time to put your estate plan in place. Your goals and needs will change over time, and that’s OK; you can always update your documents to reflect life’s changes.
2. You’re Not Rich, So You Don’t Need an Estate Plan
Another popular assumption is that people who have modest estates don’t need to do any estate planning. The reality is that most Americans do need an estate plan — regardless of how large or small their financial holdings are. If you have children or other family, own a home or a car, contribute to a 401(k) or other retirement plan, have any savings, etc., you could benefit from an estate plan of your own.
3. You Have a Will, So You’re All Set
There is more to estate planning than simply deciding how your assets should be distributed when you die. Yet, many people assume that all they need is a will. While your will is an essential part of the overall plan, it should not be your only estate planning document or strategy. Wills may not accomplish what you want them to; using a trust instead of or in addition to a will may be a better way to help you meet your goals. Similarly, your estate plan should also include legal documents designed to authorize agents to handle your financial and health care needs in the event of your incapacity.
4. You Can Handle It Yourself
Finally, in an attempt to save money, some people think they can handle their own estate planning without involving professionals. While there are many do-it-yourself websites you could turn to for “fill-in-the-blank” documents, don’t assume that this process will be simple. Worse, if you don’t understand what you’re being asked, you may inadvertently end up with documents that are not doing what you thought they would. Estate and tax laws are complex; working with a skilled professional can help ensure your assets are protected and that tax efficiency strategies are implemented.
There’s No Time Like the Present to Work on Your Estate Plan
If you don’t create your own estate plan, you’re essentially letting the state write your will for you. If you have been operating under the assumption that you didn’t need an estate plan or that you had it covered because you have a will in place, you’re not alone. There is no better time than the present to take the first step toward ensuring your wishes will be carried out.
By seeking professional help to create and implement estate planning strategies and legal documents, you’re taking care of your beneficiaries, communicating your wishes, and potentially saving your loved ones both money and stress.
To learn more, turn to the professionals at Caldwell Trust Company.