Common Estate Planning Myths Debunked
Probate law and estate planning are complex concepts. While many people may think they understand how estate planning works, it is far more nuanced than most realize. Estate planning — similar to life insurance — is one of those topics most people instinctively avoid, as it tends to remind them of their own mortality. However, myths and misconceptions about what estate planning is and what it accomplishes can have serious unintended consequences for individuals and their families. Here are real answers to some of the most common myths our Springfield estate planning lawyers routinely hear.
Only Wealthy People Need Detailed Estate Plans
Wills and trusts are commonly associated with the upper class due to longstanding media tropes. The reality, however, is much different. No matter how much or how little money you have, how large or small your family is, or whether you have a spouse or children, you should have an estate plan in place so that your wealth is protected when you die. Estate planning is also about more than just what happens when you die — you’ll also need an estate plan if you want to ensure that your medical wishes are respected in case you are ever incapacitated, such as with a durable power of attorney arrangement.
I’m Too Young to Think About Estate Planning
While it’s true that most estate plans are implemented after major life events (e.g., marriage, the birth of a child, etc.), age is irrelevant. You are never too young to start thinking about an estate plan. No one can predict the future, so as soon as you begin building wealth and have beneficiaries to pass it on to, you should consider contacting a Springfield estate planning lawyer to put a plan in place.
Estate Plans Are Only for Establishing What Happens to My Possessions When I Die
Disposing of one’s assets after death is one of the primary goals of estate planning, but it is not the only goal. Contrary to popular belief, estate planning has applications both before and after death. In addition to specifying what will happen to your assets after death, an estate plan can also be used for the following purposes (and more):
Establishing a medical advance directive
- Choosing a trusted individual as your personal representative to make decisions on your behalf should you become incapacitated
- Protecting your assets from the estate tax (such as through an irrevocable trust)
- Protecting your assets from creditors
- Circumventing potential family disputes over the distribution of your assets
- Controlling the amount of money your beneficiaries receive
- Avoiding the potentially lengthy and costly probate process
- Ensuring that your minor children are cared for in the event of your death
- Proactively planning for long-term care
For more information about optimizing your estate plan to meet your needs, please contact a Springfield estate planning lawyer.
All I Really Need Is a Will for My Estate Plan
Wills form the foundation of many estate plans, but they do have significant drawbacks. Most importantly, wills must go through probate, which can potentially be a slow and expensive process. Wills in Missouri also become a matter of public record once they are filed, presenting privacy concerns for many individuals. And will generally provide much less estate tax protection than other estate planning instruments. You can avoid many of those headaches by incorporating trusts into your estate plan.
I Set Up an Estate Plan Years Ago, So I Should Be Good to Go
Estate planning is not a “one and done” consideration. Depending on what stage of your life you create your estate plan, your circumstances could change radically. Your personal wealth could fluctuate, the types of assets you own could change, and the composition of your family could shift. Generally, you will want to update your estate plan in the following scenarios:
- You get married or divorced
- You have a child
- Your spouse or a child dies
- Your child gets married or divorced
- You move to a different state
- You receive an inheritance
- You start a business
- You purchase life insurance
- There is a change in the law that could affect your estate plan
- A person you appointed as trustee, guardian, or attorney-in-fact under a power of attorney dies or your relationship with them changes significantly
Failing to update your estate plan after one or more of these events could result in your estate being distributed contrary to your wishes.
If I Die Without a Will, My Family Will Figure Out What to Do With My Estate
It is logical to assume that your family will decide what to do with your estate if you die without a will. However, that is not how the law works. Dying without a will is known as dying “intestate,” and the disposition of your estate is governed by statute. Missouri’s intestate succession statute attempts to mimic the distribution scheme a typical decedent would want — i.e., to the spouse first, then to children, then to parents, siblings, uncles and aunts, etc. While your family may choose to make modifications after the initial distribution, that distribution scheme is set in law.
My Spouse Will Automatically Get Everything if I Die Without a Will
If you die without a will, your spouse will inherit your entire intestate estate only if you do not have children. If you have children and all of your children are also your spouse’s children, your spouse will receive most, but not all, of your estate. If you have children from someone other than your spouse, he or she will receive an even smaller portion of your estate.
Learn More About Setting Up an Estate Plan From a Springfield Estate Planning Lawyer
Misconceptions about how estate planning works can have serious repercussions for you and your family. The best way to ensure that your estate plan accomplishes your goals and disposes of your property the way you want is with the assistance of an experienced attorney. For more information, please contact a Springfield estate planning lawyer at LifeGen Law Group by calling 417-823-9898 or using our online contact form.