1. It is Only for the Rich
Often, when we see headlines about estate planning, they’re typically focused on high-profile individuals – wealthy entrepreneurs or celebrities who’ve either neglected to create an estate plan, made a mistake in their plan, or have caused a family feud over their estate.
This generates the perception that estate planning is only for the rich, who can afford to hire professionals to manage their substantial assets. Many ordinary people might consequently dismiss the idea of creating an estate plan, assuming their assets are too insignificant to warrant one. However, this assumption couldn’t be more incorrect.
Estate planning isn’t merely about wealth distribution. It’s a comprehensive process that not only determines the allocation of your assets after your demise but also addresses potential scenarios where you might be incapable of making decisions for yourself. This latter situation is, in fact, more likely to occur than not.
Without an estate plan, if you become incapacitated, the court will have to designate someone to make crucial medical and financial decisions on your behalf. This procedure can be lengthy, costly, and public, potentially causing conflict within your family if there’s disagreement over who should be appointed and how decisions should be rendered.
Importantly, even if you consider your resources to be modest, it’s worth contemplating who would inherit your hard-earned savings upon your death. Without an estate plan, this decision falls to state law. Often, the state’s assumptions about your wishes may not align with your actual intentions. But without an estate plan formalizing your preferences, the state has no choice but to intervene.
Estate planning is for everyone, regardless of the size of your assets. It’s about ensuring your wishes are honored and your loved ones are protected, no matter what the future holds.
2. My Partner Will Inherit Everything
It’s a common practice for married couples to jointly own property and bank accounts. The principle of joint ownership or tenancy by the entirety stipulates that upon the death of one spouse, the surviving partner automatically becomes the sole owner. This arrangement often suits many couples.
However, it’s important to recognize the potential pitfalls of this approach. While it may seem straightforward for assets to automatically transition to the surviving spouse, this method lacks any form of safeguarding. Imagine a situation where you are sued following a car accident after your spouse has passed away. All the assets that have transitioned to your ownership are now exposed to creditors and can be used to settle any legal claims against you.
Moreover, consider what could happen if your spouse remarries after your death. The assets that were once jointly owned could now be spent without any regard for your original intentions or the interests of your children. This concern is especially relevant today, given the prevalence of blended families.
Estate planning isn’t about excluding your spouse from your assets. It’s an opportunity for both of you to discuss and decide how your shared assets should be handled upon either’s death. This process ensures the financial security of the surviving spouse and allows any remaining assets to be distributed according to both parties’ wishes. Therefore, estate planning provides control over your financial legacy and peace of mind for your family.
3. I Already Have a Will, I Don’t Need an Estate Plan
Even though many people believe that creating a will can help them avoid probate, this isn’t necessarily the case. The will must still go through probate court for the assets to be distributed.
In some jurisdictions, if the estate’s value is below a certain amount, it’s possible to file a petition to distribute the assets without going through the usual probate process. Similarly, in certain states, an affidavit can be used to gather and distribute assets if their total worth falls under a specified limit.
Probate processes can either be supervised or unsupervised. Supervised probate involves a probate judge who oversees every step of the process and approves the actions of the personal representative. On the other hand, unsupervised probate can be an option when there are no disputes, and all involved parties are cooperative. However, certain documents may still need to be filed.
Regardless of being supervised or unsupervised, both types of probate can be time-consuming and might expose personal and financial affairs as public record.
Your peace of mind is our priority
Our dedicated team is on standby to address all your inquiries regarding estate planning and the intricacies of the process. We believe in crafting unique, tailored plans that offer the right protection for you and your loved ones. Don’t hesitate to reach out to us today.