Here’s a summary of the most common misunderstanding people have about Estate Planning that I hear every day:
Myth #1: You only need Estate Planning if you are old
Many young people are under the impression that estate planning doesn’t apply to them. They think that only middle-aged or older people with significant assets need to plan their estates.
However, nothing could be further from the truth. Estate planning doesn’t have anything to do with age or how much assets someone has. Life is full of uncertainty, especially for younger people since they tend to travel more and engage in more risky activities. Therefore, it’s important to conduct basic estate planning even when you’re young.
One of the biggest risks of young people not doing estate planning is that their assets might have to go through probate after they die. In this case, assets are distributed by the state rather than according to your wishes. The probate process also exposes the details of your assets and family to the public.
Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything
Many married couples own property or bank accounts jointly, where if one spouse dies, then the surviving spouse automatically inherits the asset.
However, while it is convenient for assets to pass automatically to your spouse, this outright distribution offers no protection. What happens if, after the first spouse dies, the surviving spouse gets into a car accident and is sued? This asset will be available to satisfy any judgment that could be entered against the surviving spouse resulting from a lawsuit.
Furthermore, what if, after you die, your spouse gets remarried? If your spouse forgets to create a pre-nuptial agreement, the new spouse can have access to the asset you intended to pass to your children. And worse, your spouse gets remarried and then passes away, if the new spouse does not like your children, he/she can take over the entire estate and may not give anything to your children. With blended families being common today, this is a real concern for many people.
Estate planning allows the two of you to sit down and plan out what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property are properly protected for the children.
Myth #3: I can just write up a Will
Many people believe that if they have a will, they can avoid probate. Unfortunately, they are wrong.
While a will is an easy way to specify who gets your assets once you have passed, it requires going through the probate court. The probate court is a lengthy and expensive process. The probate court is also a public court so all of your personal information will be exposed to the public.
In summary, many people postpone their estate planning because they don’t fully understand the benefits and the savings it provides for their family. Some even think that it’s a very difficult process. We are here to help answer any questions you may have about estate planning and its process. Together, we can create a plan that will ensure that you and your family are properly protected. Give us a call today: 408-978-7076
