I wanted to take the time to clear up some estate planning myths – things that clients think are true, when they are far from reality.
- Estate planning is only for the wealthy.
Estate planning is for everyone. No matter what assets you have – you have assets. You car, house, special jewelry, China from “Aunt Jane”, a special ring from “Grandma Jo”. These are all assets, i.e., your stuff and by having a Will you are allowed to pick who will inherit your things. Some items might be sentimental while others might have true worth, and you want the right person to benefit from these assets after you pass away.
- I am too young to need a Will.
Anyone over the age of 18 should have a Will. By not having one you leave your family to deal with the emotional process of an heirship proceeding and having to call 2 witnesses to testify in Court as to who your heirs will be. Who wants to put their family through something uncomfortable and time consuming?
- I only need a Will.
Well, having a Will in place is great. However, estate planning is also incapacity planning which allows you to designate the people who can help you with certain financial or medical decisions if you need that help.
- I am married, so my spouse will get everything anyway.
This one is so not true. It truly depends on so many factors and yes, the State of Texas has guidelines for your heirs, should you die without a Will in place. But what about kids from a prior marriage? Second spouse? Blended families? Separate property – meaning something that you inherited property or owned property prior to marriage. These items complicate the situation and in certain circumstances mean that no, your spouse does not necessarily just inherit everything.
- My family will “do the right thing.”
I will say that families rarely do the right thing. They fight. Death is emotional and at first there can be a lot of blame. Having your wishes on paper with a Will means that you have select what will happen and who will inherit.
- I just want to make everyone happy.
Unfortunately, life is not fair. Your assets are yours – your hard-earned dollars are yours. Do with it what you want, not what makes people happy.
- You only need to designate one person or have one beneficiary.
Estate planning is for the back up to the back up. I never advise a client to select only 1 Executor or 1 agent as their power of attorney. I always recommend a primary person and a backup election. If you have 3 trusted people, even better. And I remind my clients that these appointments are just that appointments, no one is bound to serve for you. Maybe it is too emotional or too time consuming or they live outside Texas, or they die before you and you fail to update your documents. For any and all of these reasons, we have back up parties selected, just in case.
- I don’t have to worry about life insurance or retirement accounts.
While it is true that life insurance and retirement accounts do have beneficiary designations, and these are contracts, so they pass according to your beneficiary designations and do not go through probate. However, you still need to review them to ensure they are up to date and state your proper choice for beneficiary.
- I can do it myself.
The internet suggests that yes, doing it yourself, a Legal Zoom Will, is an option. I obviously do not recommend it. I can truthfully say that have reviewed several of these “do it yourself” options and so many good planning items are missing. It is better to seek an estate planning attorney to walk you through your options and select the best plan for you and your situation.
- Done once, done forever.
Unfortunately, done once is not done forever. Estate planning follows your life and your life choices and current situation. No you do not have to update your estate planning documents every single time something changes, but if you have a big life change – birth of a child, marriage, divorce, death in the family, or you move out of state, you should update your documents. And everyone should review their documents once a year to make sure they reflect your current wishes and life situation.
“Good luck is the result of good planning.” Anonymous.