Like any other complex subject, estate planning has its share of myths and misconceptions. Understanding the top three estate planning myths will help you to create and maintain a plan that will work the way you expect it to work when it's needed.
Estate Planning Myth #1 - You Don't Need an Estate Plan Because Your Spouse Will Inherit Everything
A common belief is that if you're married and you don't have a Will or a Trust, your spouse will still inherit everything. Unfortunately, this is not always the case. Who will inherit your estate even if you're married depends on many different factors, including how your property is titled, who you have named on your beneficiary designations, and the laws of the state where you live and any other state where you own property. The only way to ensure that your spouse will inherit everything is to sit down with an experienced estate planning attorney who will help you create an estate plan that will meet all of your goals.
Estate Planning Myth #2 - You Don't Need an Estate Plan Because Your Family Knows Your Final Wishes
You've shared your final wishes with your family and you're confident that they'll "do the right thing" after you die. Unfortunately, without having these wishes written down in a valid Will or a valid Trust, your family may not be able to fulfill your intentions for several reasons. First, how your property is listed will determine who inherits it, not who you've told your family you want to inherit it. In addition, if you fail to complete or update the beneficiary designations for assets such as bank accounts and life insurance policies, your family won't have any authority to tell the bank or insurance company who should inherit the proceeds. Finally, without an estate plan, the laws of the state where you live and any other state where you own property will dictate who inherits your probate estate, not your family. The only way to ensure that your property will go to your intended heirs is to sit down with an experienced estate planning attorney who will help you create an estate plan that will meet all of your goals.
Estate Planning Myth #3 - Once You've Created Your Estate Plan, It's Done
Suppose that you've taken the time to sit down with an experienced estate planning attorney and create an estate plan that meets all of your goals. You may think that now you can sit back and relax because your estate plan is done. While this attitude may seem reasonable, unfortunately as the years go by, your life and the laws governing wills, estates, probate, trusts, and death taxes will continue to change, which means that eventually your estate plan will become out of date. The only way to ensure that your plan will work the way you intend it to work is to pull it out of the drawer every few years and have it reviewed by your estate planning attorney.
Final Thoughts About Estate Planning Myths
These are only three of the top estate planning myths. Unfortunately, there are many more. The only way to separate the myths from the reality and get a plan that will work for you and for your family is to retain the services of an experienced estate planning attorney.