Estate planning is essential for protecting your interests and those of the people you love in case of death or incapacitation. It is a critical part of a comprehensive financial plan but misconceptions have led many people to believe it is not necessary.

Don’t let these common misconceptions derail your legacy. By fully understanding the importance of estate planning, you can confidently embrace it as the key to guarding your assets, and plan for generational success.

1) Estate Planning Is Only for the Old & Sick

Some people think that they are still too young or too healthy to need an estate plan. Unfortunately, accidents and untimely departure can happen to anyone at anytime without warning. It is best to be prepared at all times.
 
In case of incapacity, an estate plan will appoint a health care agent to allow someone you trust to act as your agent for medical decisions. In case of death, you can ensure that your properties will go to the rightful people when you want and in the way you want. If you are a parent, it will allow you to name a guardian for your minor children.
 
2) Estate Planning Is Only for the Wealthy
If you have a home, a car, a bank account, or other property — you have an estate and need a plan. Even if your assets are not very large, you still need to direct to whom these will go.
 
It also enables you to have a financial power of attorney to assign someone to take care of your financial affairs if ever you will be unable to handle them yourself.
 
3) The State Will Get My Assets if I Don’t Have a Will
Each state has regulations called laws of intestate succession that determine what happens to your assets if you die without a will. The laws predetermine the eligible heir to your properties based on surviving family members.
 
Commonly, the statutory pattern for the line of succession is a surviving spouse, children, parents, brothers and sisters, grandparents, and then next of kin.  This is entirely avoidable. Determine where and how your properties will be utilized by creating an estate plan.
 
4) A Will Is Enough For the Distribution of All My Assets
Through a will, you determine the distribution of your property after death. It also enables you to pick a personal representative or executor to oversee the distribution through the probate process. However, some assets such as retirement accounts and life insurance may not be controlled by the terms stipulated in your will. These may be directly given to the named beneficiaries, and are not subject to probate. It is then very important to check your designated account beneficiaries to make sure it matches your will.

Aside from crafting a will, other legal documents are needed to be considered for the holistic protection of your assets. These include a durable power of attorney, health care power of attorney, and trust. 

A trust allows a third party called the trustee to hold assets on behalf of a beneficiary. Trusts are not subject to probate. Your beneficiaries may then gain access faster to these assets compared to those that are transferred through a will.

5) Estate Planning Is All About Asset Distribution
Estate planning is more than property distribution. It entails planning for incapacity to ensure that your healthcare decisions are carried out, and appointing someone you trust to make financial decisions on your behalf. It is also very critical to protect the future needs of a surviving spouse and/or children.  
 
6) Beneficiary Designations on Your Accounts Allow You to Avoid Probate Court

An attorney can walk you through how beneficiary designation, transfer on death designation or deeds, or trusts can pass the majority of your property outside of the probate court. Many people have set up beneficiary designations for their accounts, but miss one of their biggest assets—their house. By putting into place a transfer on death deed and other beneficiary designations you can avoid probate court and the costs and time involved. 

Don’t wait for the last minute to come; plan ahead.
 
7) Estate Planning Is a “One and Done” Situation
Crafting a plan is not the end of it. You need to revisit your plan from time to time as your life, and goals change over time. Instances like death or divorce should trigger you to review your designated beneficiaries and Estate Plan documents. Not to mention updates in tax law, considerations of your health, and the economy should be triggers to recalibrate as necessary.
 
8) I Don’t Need a Lawyer’s Help
Some people think creating an estate plan on their own can help them save money. However, doing it all yourself can give you a lot of headache in the process and can ultimately be more costly. You can avoid mistakes by consulting an experienced attorney who knows the ins and outs of estate planning.
 
 
Planning well, planning poorly, or not planning at all will determine the legacy you will be leaving for those you love after you’ve passed on or are no longer capable of making these important decisions.

If you have any questions, would like to learn more, or just want to talk through the process — we are more than happy to provide a free consultation. Don’t hesitate to contact Koler Law Office today!