Myths about Estate Planning
It’s sometimes difficult to face our own mortality, which can put estate planning on the bottom of the “to do” list. But the truth is, we are not immortal. And the moment of our death, while hopefully a distant event, cannot be predicted. Deciding to move forward with an estate plan requires us to face our looming mortality. This thought stops many people in their tracks. Which is why I like to flip the discussion – thinking not just about our own death, but instead thinking about our estate plan as a gift for our loved ones. And estate planning is truly a gift for those we love – providing them with a roadmap and some peace during an otherwise extremely stressful and emotional time.
Aside from flipping the script and viewing an estate plan as a gift for those we love, it’s also important to dispel some estate planning myths, which may be keeping us from tackling this important project. Click here to learn more about estate planning in general.
Myth #1: Only the Rich Need an Estate Plan
To be clear, the rich need an estate plan – but so does everyone else. When we hear about estate planning on the news or read about it on the internet, it usually is about a wealthy businessperson or celebrity who had no estate plan, made a mistake in their estate plan, or has family members who are angry about their estate plan. The topic catches people’s attention. Surely rich people can afford to have an estate plan done right. The rest of us may think we don’t have enough money or possessions to deserve, or afford, an actual estate plan.
This is simply not true. Estate planning is about more than just money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated (unable to manage your own affairs) and someone has to make decisions on your behalf. If you do not have an estate plan, the court will have to appoint someone to make medical and financial decisions for you. The process can be very time-consuming, expensive, and public and can wreak havoc on a family if they disagree about who should be appointed and how decisions should be made.
Even if your means are modest, you should consider who gets your hard-earned savings and real estate when you die. If you have no plan, state law will decide who gets what, and many times, that is contrary to what you want. Additionally, it’s expensive and time-consuming to let the state make decisions for you. At The Estate Planner, we work with people from all walks of life, preserving homes, property, savings, retirement plans and businesses for future generations. It doesn’t matter to us if you have a few thousand of dollars or multimillions, we can help. That said, we’re not yet working with billionaires. But to the Bill Gates and Elon Musks of the world, we would serve you with the same respect, compassion, kindness and excellent work with which we serve all of our clients. Click here for more information on why everyone needs an estate plan.
Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything
For many married couples, jointly owning property and bank accounts is common. If a couple owns accounts or property jointly or as tenants by the entirety, when one spouse dies, the surviving spouse automatically becomes the sole owner. In many cases, married individuals prefer this outcome.
However, this approach can be dangerous. While it is convenient for money and property to pass automatically to a surviving spouse, outright distribution offers no protection. What happens if, after your spouse dies, you have a car accident and get sued? If the jointly owned money and property automatically become solely yours, they are available to creditors to satisfy any judgment against you.
In addition, what if, after you die, your spouse remarries? If the brokerage account you owned jointly becomes solely your spouse’s, they can now spend it all in any way they want with no consideration for either your wishes or the next generation. Your surviving spouse’s new spouse could buy a sports car with the money you intended to pass to your children. With blended families being common today, this scenario is a real concern for many people.
Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and proactively plan what happens to your joint property and accounts when either of you dies, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.
Myth #3: A Will Avoids Probate
Many people believe that, once they have created a will, whether drafted by an experienced attorney or by using a do-it-yourself solution or online form, they have avoided probate. Unfortunately, they are wrong.
Although a will designates a person to wind up your affairs after you have passed, determines who will get your hard-earned savings and property, and, if necessary, appoints a guardian to care for your minor children, a will must be submitted to the probate court to be effective. The level of the probate court’s involvement can vary depending on the circumstances and your jurisdiction. Also, this is a public process. The will is a matter of public record and the process is not private. Click here to learn more about the difference between a will and a trust.
We are here to answer any questions you may have about estate planning, the estate planning process, or probate. Together, we can craft a unique plan to ensure that you and your family have peace of mind.
Contact The Estate Planner LLC in our St. Louis office at 314-303-3218 for assistance preparing your estate plan and for any other questions regarding Estate Planning or Elder Law.
** The choice of a lawyer is an important decision and should not be based solely on advertisements. This blog post is for informational purposes only and is not legal advice.
Written on October 15, 2022