Top estate planning myths that can hurt you

Estate Planning Myths - The Law Office of David B. FerrellIn my years as an estate planning and administration attorney, I’ve heard a lot of myths and misconceptions about estate planning. Estate planning is a complicated subject, and the resulting confusion to cause people to make costly, time-consuming, and stress-inducing mistakes. A recent article in Forbes clears up the top estate planning myths that can make you and your family worse off. Here are the highlights:

#1 Estate planning is only for very wealthy people.

As I’ve mentioned in a previous blog post, everyone should have an estate plan—no matter their level of wealth. Even if you don’t have a $5 million estate and you don’t need to worry about the estate tax (which has gotten a lot of press lately), you still need to create an estate plan. Estate planning is not just about passing on money in a tax-advantaged manner: it’s also about planning for what happens if you can’t make health care or financial decisions later in life and taking care of your children and other family members after you pass.

#2 I don’t need a will or estate plan because I’m too young.

Because no one knows when they will pass away, it’s important to create an estate plan as soon as possible. If you have accumulated important assets (like a house), gotten married, or had children, now is definitely the time to start estate planning. Even if you are unmarried and have no children, you should start to plan for your health care and finances if you become incapacitated.

#3 The state receives my assets if I die without a will 

If you pass away without a will, the state does not get your property or assets. However, the state does have its own rules, called laws of “intestacy,” that it will apply if you don’t have a will upon death. If you don’t have a will, the state will determine who receives your assets and who will become the guardian of any children under the age of 18. You might not agree with these decisions, which is why it’s important to have a will outlining your wishes.

#4 I can avoid probate by getting a will.

Understandably, many people do not want their estate to go through probate. Probate is typically a lengthy, expensive, and public legal process during which the court decides where your assets will go. Having a will does not avoid probate; it is simply legal guidance for the court. Your will is also public, meaning that it can be challenged by a family member or someone else who disagrees with it. Moreover, if you own real estate outside your home state, the property may have to go through probate in that state, as well.

If you have other questions about estate planning that you’d like answered, contact the Law Office of David B. Ferrell.

About David Ferrell

For over 30 years, David B. Ferrell has practiced excellence in the areas of probate, estate planning, DUI, and divorce law. David Ferrell is dedicated to providing each client with personal service, trustworthy advice, and expert representation. David B. Ferrell's Google+ Profile

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