One of the more difficult tasks for an attorney is to get clients to create an estate plan. The truth is that most people would rather do almost anything other than contemplate and prepare for their own inevitable passing. This is a shame because estate planning is the best way for a person to provide for the financial security of family and loved ones.
Most people refuse to admit to their reluctance to do anything that forces them to acknowledge their own mortality. Instead, they rely upon myths and misconceptions about estate planning to avoid it. Here are five commonly heard myths and the truth about each of them.
1. I’m not rich, so I don’t have an estate.
Most people believe that they do not own enough property or earn enough money to have an “estate” but everyone does. If you work and have an income, purchased a home, own a car, have bank accounts or have other assets, then you have an “estate.” By failing to establish a plan to distribute what you own to your loved ones upon your death, you are inviting disputes and disagreements or, even worse, you are leaving it to others to decide how your estate will be distributed.
2. I’m young and single, so I don’t need to look into estate planning.
It is never too early to start planning. Once you start working and have a savings account you should start thinking about what will happen if you were to die. An estate plan begun when you are young can be adjusted later on as your wealth and your family grows. Hopefully, you will be around for a long time, but an estate plan gives you the peace of mind of knowing that your wishes about the financial future of your family are in place and ready to be carried out.
3. My small estate will be greatly reduced because of taxes.
Federal taxes will not need be a factor for most people because of the current exemption that relieves estates valued at less than $5.5 million from federal estate taxes. There might be circumstances under which a federal or state estate tax return would have to be filed, so it is a good idea to discuss tax issues with a knowledgeable estate planning attorney or accountant.
4. I do not need a will or a trust because I signed a power of attorney so my affairs will be handled.
A power of attorney is an essential document that should be completed by all adults; however, it is not a substitute for a will or a trust. Generally, a power of attorney appoints and empowers a person you designate to make health care or financial decisions in the event you become disabled or incapacitated, but a power of attorney becomes null and void upon your death. A will, a charitable lead trust or another type of trust designate a representative to handle your financial affairs and the distribution of your estate after your death.
5. Estate Planning is too confusing and expensive.
While the least expensive route for estate planning may appear to be do-it-yourself pre-packaged forms and samples acquired through a Google search of the internet, this route can lead to costly mistakes. Do-it-yourself efforts could render your estate plan completely ineffective and force your loved ones to deal with costly issues and disputes associated with your estate after you are gone.
Using the services of a knowledgeable and experienced estate planning attorney can be cost effective and provide you with the peace of mind of knowing that your desires about your estate and the financial wellbeing of your loved ones will be carried out according to your instructions. Instead of procrastinating, contact Jaime Dowell at McKenna Storer today for legal advice and guidance about estate planning, wills and trusts.