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Many common misconceptions about estate planning will confuse and mislead people about the process actually works. The truth is that many of you are not sure exactly what it entails and how estate planning can benefit you. No matter your age or financial standing, it’s never too late to begin preparing for the future. Our estate planning attorneys in New Jersey want to debunk some of the most common estate planning myths and explain why you need to take action today:
Myth #1 — Only Senior Citizens Need an Estate Plan
This couldn’t be further from the truth. Having a plan in place will provide you with a security blanket for the immediate future and life after you retire. Unfortunately, the reality is that many young adults pass away unexpectedly, and a lack of preparedness can greatly affect your surviving family members. The reality is there are several life events that should trigger you to update your will and your entire estate plan.
Myth #2 — You Only Need a Will If You’re Wealthy
This is an erroneous point of view and here’s why: facilitating the transfer of assets after you pass away requires you to have a comprehensive plan in place. For example, many families create trusts because it allows them to distribute their assets without any interference from the court system. Irrevocable trusts also protect your surviving family members from creditors and lawsuits after you pass away. There are certain times that a grantor trust can be a helpful estate planning tool. Keep in mind that these are legal tools that don’t exclusively benefit wealthy people.
Myth #3 — With a Will, Your Heirs Receive Their Inheritance Immediately
Unfortunately, your family will likely have to undergo probate if you only left behind a will. This means that the court system will have to supervise the entire process. This can take months to run its course, and your family has to wait until probate is over before the transfer of assets takes place. Probate fees will also quickly accumulate, which you want to avoid.
How do you avoid probate? Set up a living trust that contains all of your assets. Designate the trustee who’ll manage the trust and name the beneficiaries who’ll receive an inheritance. This way, your surviving family members can avoid probate entirely.
Myth #4 — You Can Easily Plan Your Estate by Accessing DIY Documents Online
Yes, you can plan your estate by using the free legal resources available to you online. However, many legal experts will tell you that these documents are flawed, allowing beneficiaries and other“interested parties” to dispute your will. There are several reasons why you should never use LegalZoom to create your estate plan. Poorly drafted documents will likely cause your family to encounter serious problems as they try to settle your estate.
Myth #5 — The Only Purpose of Estate Planning Is Asset Management
Obviously, your personal finances play a significant role in planning your estate. However, you have other considerations that you have to address, such as healthcare preferences, guardianships for minor children, power of attorney, beneficiary designations, and much more. Keep in mind that you also have to communicate with your family about these decisions so that everyone’s on the same page.
Related: 4 Reasons Why You Need to Periodically Review Your Estate Plan