When it comes to estate planning, different people hold many wrong beliefs. These misconceptions lead many to make costly mistakes in their estate plan, while others wrongly believe they do not even need an estate plan at all.
Possibly you are about to embark on estate planning, but you still find the whole thing confusing. Here are the top estate planning misconceptions people hold. For further assistance, call us to speak with an estate planning attorney in Buffalo, NY.
1. Estate plan is only for the rich and mighty
Some people firmly believe that estate planning is only for the wealthy ones with millions of dollars, corporations, and mansions. And so they do not plan saying, “after all, all I have is a car and a house and some money in my bank account. What do I need estate planning for?” Nothing can be more false. So long you have some properties in your name and people you would want them to go to, you need estate planning. If you do not do estate planning, then you have no say regarding who inherits your car or house, and there most likely will be squabbles when you die. How much confusion and headache you would be putting your family through.
Regardless of the value of your estate, estate planning is for you if:
- You have people who depend on your income
- You have minors (these ones cannot inherit directly, and you need to establish guardianship for them)
- You desire to transfer your assets discreetly without court publicity
- You wish to leave funds for charity or any other organization
- You have children with special needs
- You are in a new marriage with kids from your former marriage
- You wish to transfer assets tax-efficiently, cost-effectively, quickly, and hitch-free.
- You may eventually fall sick, become incapacitated, or pass away (hence estate planning is for everyone).
2. You’re too young; you have to wait until you’re older
Many people also hold the belief that you should only do estate planning when you’re old and looking towards end-of-life. But what if disaster strikes tomorrow? What if you become incapacitated due to severe illness or an accident, or you suddenly pass away? How will your minors receive from you and get the kind of life you want? How will your intellectual property rights be managed? Who inherits them? So long as no one knows when disaster will happen, you have to start planning now for your peace of mind.
3. I definitely need a lawyer to draft my document
If your estate is a small one, you can prepare your will yourself. You can get the form online and get a healthcare directive from a hospital. So long you know what you want, and there are no complex matters to consider in your estate and family, of course, you can handle your will yourself.
4. I don’t need a lawyer at all
Now, this is where many people get it wrong. As far as you can handle your will for a simple estate, it would not be advisable to DIY when you have complicated matters to consider which you may not even be aware of. You may need professional advice from an experienced estate planning attorney to know what decisions to make. It costs less to get professional advice than have your attorney draft all your documents themselves. To speak with an estate planning attorney Buffalo NY, call us today.
5. Creating trusts is the only way to avoid probate
Probate avoidance is the basic reason most people create trusts. As probate is often lengthy and expensive, many want to avoid it. But creating a trust is not the only way to do so. In fact, not all assets can easily go into a trust, and it becomes expensive and complicated trying to go all the way. You can also own real property by joint ownership (such as with your spouse) or designate beneficiaries in your bank account, retirement account, and insurance plan. Each of these will pass outside probate without funding them into a trust. Gifting is also another way to avoid probate but requires due strategy from an experienced estate planning attorney.
6. All trusts avoid estate tax
This is wrongful thinking. There are different kinds of trusts, and not all can avoid estate tax. However, even when your trust cannot completely avoid these taxes, it can work with other strategies to minimize the tax amount. If you are worried that your estate is above the exemption amount and you wish to avoid it, be sure to speak with an experienced estate planning attorney, not just any lawyer specializing in criminal law or divorce.
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