Think you don’t need an estate plan? Think again!
Whether you are wondering how to minimize taxes, avoid probate or care for loved ones after your death, there is a lot of misinformation out there which could jeopardize your family’s future. We’re debunking common estate planning myths and offering practical solutions you can put in place now to make a difference.
Estate Planning Myth #1: I am not wealthy enough to need an estate plan.
Solution: Even if you think you’re not wealthy, a basic estate plan ensures your assets are distributed according to your wishes. Without one, the government decides where everything goes.
Estate Planning Myth #2: My children are over 18 so I can pass everything to them when I die.
Solution: A trust can help manage how your assets are distributed to ensure they’re handled wisely over time, especially if your children aren’t yet financially mature. (Hint: Many aren’t!)
Estate Planning Myth #3: I have a will, so I won’t have to go through probate.
Solution: A will must go through probate, which can be lengthy and costly. Consider other tools like trusts to help avoid this process.
Estate Planning Myth #4: I am too young for estate planning.
Solution: Estate planning isn’t just for the elderly. If you have dependents or assets, planning now can safeguard your future and your family’s well-being.
Estate Planning Myth #5: Estate taxes are not an issue given the size of my estate.
Solution: Estate tax laws can change, and even if they don’t impact you now, they might in the future. In addition, New York has its own Estate Tax which kicks in a lot sooner than the Federal Estate Tax. Proper planning can help mitigate potential tax issues.
Estate Planning Myth #6: I don’t have to worry about estate taxes because I have a revocable trust.
Solution: Although there are many benefits of a revocable trust, this document doesn’t necessarily reduce estate taxes. Let’s discuss.
Estate Planning Myth #7: My largest asset is a life insurance policy, so I won’t have to pay estate taxes.
Solution: Life insurance can be part of your estate and subject to estate taxes if not properly managed. Consider strategies to minimize potential tax impacts.
Estate Planning Myth #8: My child has godparents, so I don’t need to name a guardian.
Solution: Godparents don’t have legal custody rights. Naming a guardian in your will ensures your child’s care is legally assigned to your chosen person.
Estate Planning Myth #9: I already have a will, so I am all set.
Solution: A will alone doesn’t cover everything. Ensuring all aspects of your estate are properly managed requires a comprehensive approach. Do your beneficiary designations conflict with your will? When was your will last updated?
Estate Planning Myth #10: I set up all my accounts with beneficiary designations, so I don’t need a will.
Solution: Beneficiary designations don’t cover everything and can sometimes create conflicts or leave assets in the hands of young people who are not ready to manage the assets. Coordinating beneficiary designations, a will, and a revocable trust can help ensure your estate are managed according to your wishes.
Ready to get your estate plan in shape? Reach out to us with any questions.
Wendy Cohen