Call them urban legends or mystical myths, there is much misinformation out there about the world of estate planning. Herein, we are dispelling some of the most common myths we’ve heard in our estate planning law offices.
Myth: Estate planning is just a pile of documents
Fact: Estate planning is the incorporation of your financial and personal goals, hopes, dreams, and fears into effective legal documents. Estate planning is counseling based, not document based. This means the documents are the result of the counseling, not the other way around.
Myth: Estate planning is for the rich
Fact: No matter how rich or poor, you have an estate. Each and every adult needs his own estate plan.
Myth: I’m done with estate planning
Fact: Estate planning is a process. It’s not a “once and done.” Updating is imperative if you want you plan to work.
Myth: My will controls who gets my property
Fact: Your will only controls property in your individual name and payable to your estate. Your will does not control jointly owned property, revocable living trust property, POD and TOD property, property held in trust for someone else, and beneficiary designation property (unless the beneficiary is your estate.)
Myth: Even though I’m in a second marriage, my children will inherit my property
Fact: This is not true if you own property jointly with your second spouse or have named your spouse as the beneficiary of your life insurance and retirement accounts. This is how most married people own their property and children get unintentionally dishinherited.
Myth: The state gets my property if I die without a will
Fact: State law dictates who gets your property if you die without a will, but the state doesn’t actually get your property. Your property would only escheat to the state if you have no heirs.
Myth: We don’t need powers of attorney; I always sign my spouse’s name
Fact: You need a power of attorney to legally sign anyone’s name, including that of your spouse.
If you have questions or concerns about these estate planning myths, consult with a qualified estate planning attorney.