When it comes to estate planning, some people have a lot of misunderstanding concerning this concept. First of all, estate planning is something which everybody needs. Like it or not, everyone must one day die and there would be assets left behind which would have to be passed into the ownership of someone else. Some people may feel because they do not have a real estate or a number of assets, then they have virtually nothing to leave behind, and hence they have no need to have an estate plan. But is this really true? Is estate planning all about after-death situations? This article is aimed at answering this and debunking other myths associated with estate planning.
1. I don't need estate plan because I do not have an estate
Not true! Some people believe estate planning is only for the wealthy and those having real estates but this is only a misconception. One’s estate in this wise does not mean only one’s house, but everything in the ownership of a person. A person’s estate may include his bank accounts, car, retirement account, insurance policy as well as personal properties. All these would have to be disposed at one’s death, and this is the reason for having an estate plan. Whether or not you are wealthy, you need to plan for the disposal of these items as you may land your survivors into unexpected challenges and stress if you fail to do so.
2. Estate planning only takes effect after my death
When it comes to matters of death, people have this phobia that keeps them from talking about it. They cringe at the thought of their death and so do not want to plan towards it. But is this really so? In estate planning, there are legal documents called trusts and living wills which take effect even before the death of the individual. As the name implies, a “living will” takes effect during the lifetime of the individual, and handles matters concerning fatal or terminal health conditions. A person who desires his estate to be managed by some other person during mental or physical incapacity (since such person would be incapable of handling their own affairs themselves) may consider creating a trust. A person who desires to lay down instructions on how his medical upkeep should be handled may require creating a living will to spell out these instructions. Obviously, these estate planning tools are not just for after death situations and it is high time this estate planning misconception is annulled.
3. Estate planning is only for the aged or people with health problems
A big “NO” to this. While elderly people and those with disability or health issues have to plan for the management of their property due to their weakness (age or incapacity), they are not the only ones who need estate planning. Everyone who knows they would one day die and leave everything behind knows to plan for this. Think about young healthy entrepreneurs like Zuckerberg and the likes. If they do not plan for it, what do you think would happen to their amassed wealth if something bad were to suddenly happen to such a person? If you do not express your wishes concerning your assets, then they would be disposed according to the state laws and then, your loved ones may not receive according to what they actually deserve.
4. Estate planning is expensive and takes a lot of time
Many people refrain from estate planning because of the myth that it is too expensive. They avoid the cost of creating wills and trusts, little did they know that when these estate planning documents are not in place before one dies, more expenses will be incurred by the surviving family in trying to dispose the property. Creating a will or trust shouldn’t take more than a day, provided you know what you want and how to definitely expresses these desires. You can contact a highly competent estate planning attorney for guidance in establishing these documents, and the Internet has even provided templates of wills. Simply research for the option which best fits your situation.