Common Estate Planning Myths Debunked

Many people hold beliefs about estate planning that are problematic or simply untrue. You may have heard some of the most common myths, like that estate plans are only for people who are wealthy or that estate plans only matter when a person dies. However, many other misconceptions can hinder people from creating an effective estate plan. This post will address some of the biggest misunderstandings related to estate planning. If you believe any of these ideas, now might be a good time to speak with an Indiana estate planning lawyer about your options for protecting your assets and your family.

Myth #1: “The Terms of My Will Dictate Distribution of All My Property”

Your will determines the distribution of assets in your individual name, but certain assets that are passed by title or by beneficiary designation may not necessarily be included. This can mean that, without a comprehensive estate plan in place, your home, retirement account, or life insurance may pass by title to the joint owner or by beneficiary designation to a named beneficiary.

Titling and beneficiary designations are often just as important as a will itself. A skilled estate planning attorney can help you better protect your assets and work to minimize any unintended consequences relating to the distribution of your estate.

Myth #2: “I Am Not Old Enough to Worry About Estate Planning”

Every adult must plan for potential incapacity and death regardless of the value of their estate or their current age, and a well-crafted estate plan protects more than just your finances.

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 is critical. Not having a valid will or trust designating such a representative may result in unnecessary stress or costs for your family and could result in unwanted actions regarding your care.

Myth #3: “A Will is the Only Estate Planning Document 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 are often many considerations they do not give proper thought to. For example, children and grandchildren are common beneficiaries, but you’ll need to consider factors like the ages at which these beneficiaries can obtain assets or if it may be wise to distribute assets in 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. For this reason, even people with a relatively small estate may need to consider estate planning tools that go beyond a simple will.

Myth #4: “My Revocable Trust Will Avoid Probate”

People hoping to avoid the administration of a will in probate court may 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 could require probate. Not having a will can lead to the property passing to heirs-at-law or your closest kin.

Myth #5: “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 ten years old is likely to 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.

Schedule a Free Consultation with Estate Planning Lawyers Serving Illinois and Indiana

Misconceptions can be a major hang-up with estate planning, and many people do not realize how important an estate plan can be for their long-term goals.

If you do not have an estate plan or need to update an existing one, 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 both Illinois and Indiana. Our firm will take the time to understand your long-term goals and help you craft an estate plan that supports the outcomes you are seeking. Call us or contact us online to schedule a free consultation and go over all of the unique details of your case.