This is an article from Kulas Law Group (www.kulaslaw.com/) in Port St. Lucie, Florida, that we thought others may find helpful.
Although most Americans admit to knowing the importance of inheritance planning, over half do not have a plan in place. One reason for this could be that there are so many myths and misconceptions about inheritance planning. The average person has little or no reason to know anything about inheritance planning until they actually sit down to create their plan, which explains the frequent myths and misconceptions. Unfortunately, some of those myths can result in costly mistakes that can negatively impact you, your estate, and/or your loved ones.
Myth #1 – I don’t need to worry about inheritance planning until I have a valuable estate.
This is something we hear all the time from people who have yet to create an inheritance plan, also referred to as an “estate plan.” People believe that they must reach an imaginary asset threshold before they need to start inheritance planning. The truth is that the value of your assets is not important. What is important is that they are your assets and you should decide what happens to them when you are gone. Without at least a basic estate plan in place, the state will decide what happens to your assets. That promise you made to your favorite niece assuring her that she will get your family heirlooms will not be honored. The charity you donate to on a regular basis will also receive nothing if you die intestate (without a Will). What’s important is not the size or worth of your assets, but your right to decide what happens to them.
Myth #2 – I’m too young to worry about inheritance planning.
This is often expressed along with Myth #1. Your age, however, is not important when it comes to inheritance planning. Every adult, without regard to age, needs an estate plan. Life changes rapidly when we are young. Before you know it, you are married and expecting your first child. Don’t make the mistake of waiting until you have people to protect to create your inheritance plan. The plan should already be in place. Your Last Will and Testament, for example, is your only opportunity to let a judge know who you would want to be your child’s Guardian if one is ever needed. We don’t get a warning when tragedy is going to strike, which is why it is so important to always have an inheritance plan in place.
Myth #3 – I have a Will so I’m done with inheritance planning.
Your Last Will and Testament may be the foundation for your estate plan; however, a comprehensive estate plan typically includes additional strategies and documents to help achieve all of your inheritance planning goals. Moreover, your plan needs to be reviewed and revised on a regular basis as well as when a major life change occurs.
Myth #4 – It’s best to appoint someone you trust, like a spouse, to fiduciary roles.
A common myth – and a big mistake. Fiduciary roles in your inheritance plan, such as Executor or Trustee, play critical roles in your plan and come with a wide variety of duties and responsibilities. Appointing the right person will result in the success of your overall plan whereas the wrong person could cause your plan to fail. Consider what experience and knowledge the role requires before making your appointment.
Myth #5 – You can save time and money using DIY forms you find on the internet.
On the contrary, using fill-in-the-blank “DIY” forms from the internet will frequently result in a much more time consuming and costly probate of your estate after you are gone. The reason for this is that DIY forms are often riddled with out-of-state information and errors. They are also known for creating ambiguities and failing to dispose of your entire estate. Any of these problems will result in litigation during the probate of your estate. Ultimately, this costs your loved ones much more time and money than you saved by not working with an experienced estate planning attorney.
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