According to a recent report, 44% of Americans do not have a basic will, let alone an estate plan. Some of the reasons cited were the lack of time, unwillingness to think about their own incapacity or mortality, and the procrastination habit. An estimate of 14% thought their assets would be automatically transferred to their spouse and children in the event of their death. This is one of the common myths many people have about estate planning.
Here are some misconceptions about estate planning debunked.
“You must have a trust to avoid taxes”
Estate taxes are not affected, whether or not you have a will. If you have a trust, you can double the amount left to your spouse or children free of any taxes. No matter how big your state is, there is no estate tax charge if you name your assets to your spouse or children.
“Everything I have will simply go to my spouse and children”
Unfortunately, the law does not work automatically. If you die without a will, the court may appoint an administrator or instruct your heirs to appoint one. Additionally, they may have to deal with claims of creditors, accounting of assets, coming up with an inventory, and so on. To avoid this, a Salt Lake City estate planning lawyer may help you draft a will that clearly outlines the assets your beneficiaries will get. Moreover, this can state who can make important decisions if you are unable to do so.
“Probate only means high costs and lengthy delays”
Having a probate does not necessarily mean you have to go through costly procedures and lengthy delays. Conversely, avoiding probates may put you at a risk of incurring more costs.
“Estate planning should only be done by the wealthy”
Anyone can accomplish estate planning, as long as they are of legal age. You do not need to have multiple assets to draft a will. A will can also include your special requests and your preferred funeral arrangements.
“All my assets will be distributed based on my will”
A will only states your final wishes and controls your probate assets; it does not control assets held in a trust, jointly-owned assets, and beneficiary-designated accounts. When updating your estate plan, you should review your property ownership.
“I am too young to have a will”
Planning your estate early is important, as this prevents confusion and chaos in the event of sudden death.
If you feel like it is time to create your plan, talk to an estate planning attorney who will explain all available options. Do not wait until it is too late; plan early.