4 Common Estate Planning Myths … Busted!
October 21-27 was National Estate Planning Awareness Week, which means it's time to dispel some of the most common myths preventing people from taking important steps to protect themselves and their loved ones.
Contrary to what you might think, estate planning is NOT only for the wealthy or the elderly, and it doesn’t have to be complicated and expensive.
The truth is, estate planning is critical for everyone — regardless of age or financial status. Read on to learn more!
Myth #1: Estate Planning is Only for the Wealthy
One of the most persistent myths about estate planning is that it's only necessary if you have significant wealth or valuable assets. This is SO far from the truth. Estate planning isn't about the size of your estate; it's about making sure that when something happens to you, the people you love aren’t left with a hot mess to deal with.
Consider this … do you have a bank account? A car? Personal belongings with sentimental value? A life insurance policy? If you answered yes to any of these, you have an estate.
But even more importantly, do you have people you care about? Family members who depend on you? Or people you love who are going to be stuck dealing with a fallout, if you don’t take care of these things while you can? If so, you need an estate plan.
Estate planning isn't just about distributing assets. It's about making important decisions that will affect your loved ones. For instance:
Who will take care of your minor children if something happens to you? And, how will they take care of them?
Who will make medical decisions on your behalf if you're incapacitated? And, how will they make those decisions?
Who will manage your digital assets, like email, social media accounts, and cryptocurrency?
Who will make sure your bills get paid?
These questions apply to everyone, regardless of their net worth. By creating an estate plan, you're not flaunting wealth; you're taking responsibility for your life and the people you care about. After all, someone will have to deal with these things. It’s unavoidable. You can (1) do it now and make it easy on your loved ones (and have more control over outcomes), or (2) procrastinate it (or avoid it altogether) and leave the people you love with a complicated and expensive mess to clean up, if you become incapacitated or after you die.
Myth #2: Estate Planning is Complicated and Expensive
Another common misconception is that estate planning is an overly complex and costly process. While it's true that estate planning involves legal documents and careful consideration, it doesn't have to be overwhelming or break the bank.
The complexity and cost of your estate plan will depend on your specific situation and goals. Between our 30-minute complimentary consultation and two-hour Life & Legacy Planning Session, we’ll educate you and support you in making an informed and carefully considered choice as to which plan works best for you and your loved ones.
When you consider the peace of mind and potential savings in time, stress, and money for your loved ones down the line, estate planning is often the best way to save your loved ones time and money, while also creating optimal value and use of your resources, during your own lifetime. Think of it as insurance for your legacy – a small cost now can save your loved ones significant trouble and expense later.
Myth #3: I'm Too Young to Need an Estate Plan
Sooo, you might think estate planning is something you can put off until you're older … but this is a dangerous gamble.
Life is unpredictable, and having an estate plan in place is so important, regardless of your age.
If something happens to you:
Who will manage your social media accounts?
Who will take care of your pets?
What will happen to your small business or side hustle?
Who will be responsible for paying off your debts?
Moreover, estate planning is CRITICAL if you're a young parent.
Your estate plan can designate guardians for your children and set up trusts to manage any assets they might inherit. Without these provisions, the court may have to decide who raises your children, leading to family disputes and, even worse, potentially placing your children with someone you wouldn't have chosen.
Even if you're single with no dependents, an estate plan is super important — maybe even more so because it’s up to you to determine who will care for you, if you cannot care for yourself. You really don’t want to leave that to a judge to decide. Your plan will ensure your wishes are respected if you become incapacitated, designate who will make medical decisions for you, and specify how you want your assets distributed. This can prevent potential conflicts among family members and ensure your hard-earned assets go to the people or causes you care about most.
Remember, estate planning isn't about planning for your death; it's about planning for life, and the uncertainties sure to come. It's about taking control of your future and caring for the people and things you love, no matter your age.
Myth #4: Once I Create an Estate Plan, I'm Done
Many people think that estate planning is a “one and done” process — but that is yet another misconception.
Major life events that might necessitate updates to your estate plan include:
Marriage or divorce
Birth or adoption of children
Death of a beneficiary or executor
Significant changes in your financial situation
Purchase of a home or other major asset
Starting a business
Moving to a different state
Even if you haven't experienced any major life changes, it's important to review your estate plan at least every three years, though we recommend that you anuually review your assets and how they are titled. Laws change, and what was optimal a few years ago might not be the best strategy now.
Regular reviews also give you a chance to reconsider your choices. Maybe the person you initially chose as your children's guardian is no longer the best fit. Or perhaps your financial situation has improved, and you'd like to include charitable giving in your estate plan.
Keeping your estate plan up-to-date ensures that it continues to reflect your wishes and provides the best possible protection for your loved ones. Think of it as a living document that grows and changes with you, rather than a static set of instructions.
If you’re interested in learning more, book a complimentary consultation with us here — we can’t wait to meet you!
