Common Estate Planning Myths Debunked

Many people hold a number of beliefs about estate plans that are problematic or simply untrue, with some of the most common being that people are not wealthy enough to need estate plans, estate plans only matter when a person dies, or that having a will is enough for coverage in cases of death. If you believe any of these ideas, now might be a good time to speak with an Illinois or Indiana estate planning lawyer about your options.

Misconceptions can be a major hangup with estate planning for most people, many of whom do not realize how important an estate plan can be for their long-term goals. This post will attempt to address some of the biggest issues.

The Terms Of My Will Dictate Distribution Of My Property

Your will only distributes the assets left in your individual name, meaning that assets that will pass by title or by beneficiary designation pass outside of the will by operation of law. This can mean that a home, retirement account, or life insurance that represents a majority of your estate will pass by title to the joint owner or by beneficiary designation to a named beneficiary. 

Unless you coordinate assets passing by operation of law with the will, there can be consequences relating to the distribution of the property. Many common software programs that create templates or form wills do not accurately reflect a person’s true objectives regarding distribution of the estate, and titling and beneficiary designations will be equally important as a will itself.

I Am Not Old Enough to Worry About Estate Planning

The 2022 Wills and Estate Planning Study from Caring.com reports that one in three Americans who have no will or living trust claim they do not have enough assets to leave behind, but the good news is that since the beginning of the COVID-19 pandemic, the number of 18-34 year-olds with estate planning documents went up by 50 percent. Every single adult must plan for potential incapacity and death regardless of the value of their estate. 

Nobody can truly prepare for accidents or illnesses, which is why having a legal representative you name to handle financial and medical care decisions in the event of incapacity becomes so critical. Not having a valid will or trust designating such a representative for an estate only results in more costs for your family to determine a rightful party.

A Will Is The Only Thing I Need

While many people enter the estate planning process believing that their needs will be quite simple to satisfy, the truth is that there can often be many other considerations they had not given proper thought to. While children and grandchildren often make for common beneficiaries, there may need to be considerations you give to the ages at which these beneficiaries can obtain assets and whether you need to specify a certain age or order installments.

You may also have issues relating to guardianship of your minor children, estate taxes, or succession plans relating to unique assets. There can also be complications in blended families or stepfamilies.

My Revocable Trust Will Avoid Probate

People hoping to avoid the administration of a will in probate court will use a revocable living trust as their tool of choice for an estate plan, but that revocable trust will need to have proper funding in order to avoid probate. This means that you need to title assets of your estate in the name of the trust or payable to the trust by beneficiary designation.

If you create a revocable living trust but do not transfer certain property into it, assets will require probate. Not having a will can lead to the property passing to heirs-at-law or your closest kin, as any property left outside your trust will still require probate.

I Already Have a Complete Estate Plan

Anybody saying this needs to ask themselves how long ago they created the estate plan because any estate plan that is more than 10 years old will probably need an update. Not only do circumstances in life change, but laws do too.

Revisions may only involve minor changes, but those changes can still be important. Furthermore, you will want to have the knowledge that your current estate plan is as complete as possible right now.

Call Us Today to Schedule a Free Consultation with an Estate Planning Lawyer Serving Illinois and Indiana

If you either do not have an estate plan or may need to update an estate plan, make sure to work with an experienced attorney. Spagnolo & Hoeksema, LLC, handles estate plans of all sizes for clients throughout the greater Chicagoland area, serving parts of both Illinois and Indiana.

Our firm will take the time to really pin down your long-term desires and make sure that you will be able to get the full coverage you are seeking. You can call us or contact us online to schedule a free consultation so we can take the time to sit down with you and go over all of the unique details of your case.