People tend to avoid estate planning like it’s the plague. However, no financial plan can be complete without one. Sure, thinking about your own demise doesn’t rate high on the ‘fun scale,’ but not everything in life does.
To avoid estate planning, people tell themselves all kinds of lies. Forbes’s recent article, “3 Lies People Tell Themselves About Estate Planning,” discusses three lies people tell themselves frequently to delay or avoid creating the documents that will protect their legacy.
1. There’s No Need for a Will Because I Don’t Have Much Money.
This is not true. A typical will covers more than just finances. Your will can be used to protect your family, instructing who should become the guardian for your children, if you pass away. Your will can also be used to state the way in which you’d like your body to be handled after your death. A will provides details, so your final wishes are carried out. Your family won’t be left guessing what you wanted.
2. There’s No Need for a Will, Because Nothing’s Changed.
People say this all the time, but the law may have changed without your knowledge, necessitating modifications to your estate plan. For instance, many of the estate plans that were created years ago with the objective of minimizing federal estate tax are now out of date. You should also consider updating your estate plan to name younger adults to serve in critical fiduciary roles, because your original choices may no longer be able to serve.
3. There’s No Need to Update My Beneficiary Forms Because I Have a Will.
A will doesn’t control the disposition of all of your assets, because it only controls assets that pass through the probate estate. For example, married couples typically own their homes in joint tenancy, so the home is automatically passes to the surviving spouse, no matter what the first-to-die spouse’s will says. In addition, retirement accounts don’t pass via a will. These accounts, such as IRAs, Roth IRAs, 401(k)s, 403(b)s and similar accounts, pass by beneficiary designations. It’s important to understand that your beneficiary forms generally supersede your Will.
Whether you have no estate plan, or you created one years ago, we invite you to request a consultation with one of our experienced attorneys, by submitting our online form.