5 Estate Planning Myths

Estate planning is an act of love that gives families peace of mind. However, people often misunderstand what an estate plan is, what it does, and who needs one. Today, I am helping to debunk five of the most prevalent myths about estate planning, so individuals can better understand the importance and breadth of estate planning in securing their futures and their loved ones’ well-being.

Myth 1: Estate Planning is Only for the Wealthy

One common misconception about estate planning is that it is only necessary for the wealthy. In reality, an estate plan is a roadmap for your desires that is necessary for everyone, regardless of the size of their estate. It involves ensuring that your assets are distributed according to your instructions, appointing guardians for minor children, and making health care decisions. A good estate plan provides clear guidance to your loved ones. Without an estate plan, loved ones in times of crisis are left without clear direction. Moreover, the default instructions under state laws may not align with your wishes.

Myth 2: Estate Planning is Only for Older Adults

Another misconception is that estate planning is something to think about only in old age. Unfortunately, death, accidents, and unexpected illnesses can affect us at any age, and there are real consequences associated with waiting too long to create an estate plan. A loved one who has lost capacity to think and communicate clearly can no longer execute a Will or a power of attorney and you cannot legally do so on their behalf. Without proper estate planning documents, you cannot legally make health care or financial decisions for a child over the age of 18, without going through the lengthy and costly process of appointing a legal guardian. Further, parents can only designate guardians for minor children or children with special needs through their Wills. Life is unpredictable, making it crucial to have a plan in place that ensures your wishes are carried out, no matter your age.

Myth 3: Estate Planning is Only About Writing a Will

While a Will is a crucial component of estate planning, it is not the only document you need. Estate planning also involves creating advanced directives, establishing powers of attorney for healthcare and financial matters, and possibly setting up trusts. Each of these documents serves different purposes, such as managing assets during your lifetime and making healthcare decisions if you become unable to do so. Incapacitation for someone with only a Will creates an avoidable hardship for that person and their loved ones.

Myth 4: My Family Will Sort Things Out When I am Gone

This way of thinking creates a whirlwind of chaos for those who are left behind, especially if there are sibling disagreements, blended families, second marriages, creditors, or other unresolved issues. Often I hear that the loved one who passed was the peacemaker, great at keeping all these issues at bay. Now with the peacemaker passed on to his or her reward, the cracks grow and expand. This unpleasant scenario and the resulting family turmoil can all be avoided by using an estate plan that clearly outlines your desires.

Myth 5: Once You Have an Estate Plan, You’re Done

Estate planning is not a one-time event. Your circumstances and desires may change over time due to marriage, divorce, births, deaths, changes in financial status, or changes in the law. Even the best estate plans, without proper updates to reflect changes in your desires or to account for certain roadblocks in the path of your loved ones (e.g., bankruptcy, mental health, addiction or other behavioral issues), may guide your loved ones to an undesirable destination. It is essential to review and update your estate plan periodically to ensure it continues to reflect your current situation and stated goals.

If you need help and want to know where you stand when it comes to estate planning, please do not hesitate to contact me.