Myth 1: “I don’t have enough assets to need an estate plan.”
This dangerously narrow thinking ignores that estate planning isn’t just about financial wealth. It’s about doing the right thing for the people you love so you don’t leave a mess, and about ensuring your wishes for your own care are considered if you cannot make decisions for yourself due to accident or illness.
If you haven’t created a comprehensive estate plan, your loved ones could face lengthy court proceedings, unnecessary taxes, and difficulty accessing financial accounts, which could have devastating consequences if bills need to be paid, including college tuition for your kids.
It’s also about:
- Ensuring what you DO have goes to the people you want in the way you want (and stays out of the court process);
- Your children being raised by people you (and they) know, love and trust;
- Your wishes for your medical care are honored if you become incapacitated;
- Only people you trust are able to manage your finances if you can’t manage your finances yourself, and
- Leaving your loved ones with your most valuable assets – your values, insights, stories, experiences and, if you have young kids, your guidance and advice.
In addition, an estate plan can minimize conflict among your loved ones. By clearly outlining your intentions, you significantly reduce the chances of misunderstandings or disputes, while also increasing the chances that your resources will be used to create a better future for the people you love.
Finally, an estate plan that works will save your loved ones time and money by ensuring the people who matter know what you have, where it is, how to find it, what to do with it when they do find it, and keeps them out of court and conflict.
It’s easy to see an estate plan is not a luxury reserved for the wealthy; it’s a necessity for anyone who has things that matter, and people who matter. If that’s you, and you don’t have an estate plan (or your plan could be outdated) let’s talk soon.
Myth 2: “My spouse and I trust each other completely.”
Ameriprise’s survey reveals 95% of couples trust each other with finances and 91% share financial values. When couples don’t plan because they trust each other to carry out each other’s wishes, they’re overlooking several essential matters.
For instance, trust between spouses doesn’t prevent legal complications or avoid court. Without an estate plan, a surviving spouse may face lengthy probate proceedings, increased tax burdens, and difficulty accessing accounts. This strain can damage relationships and deplete assets meant for heirs. Even worse, if both spouses die simultaneously, the complications can be significant, especially if the spouses have children from prior marriages, or if they have minor children.
Another potential issue arises if the surviving spouse remarries. Without an estate plan, assets could unintentionally be passed to the new spouse instead of the people the deceased spouse loved and intended his or her assets to go to. In some cases, children may even be accidentally disinherited, leaving them without the financial support their parent had planned to provide.
Myth 3: “Estate planning is too expensive.”
Another common misconception is that estate planning is a luxury reserved for the wealthy because of its perceived high cost. The reality? Avoiding estate planning due to cost concerns can lead to far more significant time and money costs for the people you love down the road. Without a plan, your loved ones may face costly probate proceedings, unnecessary taxes, and legal disputes that can drain your estate and create additional stress for your loved ones during an already difficult time. These costs often far exceed the upfront investment of creating an estate plan.
Beyond the financial aspect, the peace of mind that comes with knowing your loved ones are protected is invaluable. A comprehensive estate plan ensures that your wishes are carried out, your loved ones are cared for, and potential conflicts are minimized. By addressing these matters proactively, you save the people you love from emotional and financial burdens, allowing them to take the time to grieve and ensuring that everything is set up properly. Estate planning is truly one of the best gifts you can give to the people you love.
Myth 4: “I created an estate plan when my kids were young. We’re all set!”
Estate planning is not something you create and put on a shelf, hoping it will work when you and your family need it most. Estate planning is ongoing and requires regular attention to ensure it reflects your current life and wishes. Major life changes—such as a divorce, a new marriage, the birth of a grandchild, or significant financial shifts—can render an older plan ineffective. Laws and regulations also evolve, which could impact your estate plan’s validity or tax efficiency.
If you created your plan years ago, it’s essential to review and update it regularly to ensure it still protects your loved ones and aligns with your goals. Your estate plan also protects you and you should regularly review who you have as your Durable Power of Attorney or Health Care Proxy. An older plan may name someone you no longer want, or who is capable.
Take Action Now to Protect the People You Love
At The Parents Estate Planning Law Firm, we believe in educating our clients, beginning with addressing these myths and more.
Our compassionate and experienced attorneys begin every Planning Session with helping you to understand clearly what would happen to your loved ones and your assets if you became incapacitated or passed away. Then you will work with your attorney to gain clarity on what you do want to happen and together you will create an estate plan that aligns with your values and goals, ensuring everyone and everything you love is protected, and that your plan will work when your loved ones need it to.
The first step is to schedule a complimentary 15-minute call with our Client Services Coordinator.
Book a call with us today to get started
