68% of Americans have not done estate planning and don’t have any wills. This is probably because many believe in common estate planning myths.
Estate planning involves creating financial and medical rules for your future and your beneficiaries. While the process doesn’t involve many details, it has caused widespread confusion. The resulting myths have led to the loss of money, time, and legal protection for many people.
You would be better off if you understood the most common estate planning myths. Here are the ones that you should know and avoid.
A Will Determines the Distribution of All Property
Some people assume that a will determines the distribution of everything that they own. This is not true because it’ll only disburse the assets in your name.
Your beneficiaries may get the assets as a result of a beneficiary designation or by title. Unless you list these assets in your will, the applicable operation of law will take its course. That’s why your will must state your property ownership status.
Estate Planning Is for Senior Citizens
Any person can die at any time, even if they are in perfect health. If you don’t conduct estate planning while alive, your family will undergo property division problems. Therefore, it’s a mistake to believe that only older people should have a will.
The smart homeowner will appoint an estate planning lawyer to manage their medical and financial affairs if they get incapacitated. The attorney should also determine how your assets and properties will be distributed if you pass on.
Only Wealthy Individuals Do Estate Planning
Several people fail to do estate planning because they think estate planning is for the rich. The correct position is that there’s no minimum property for estate planning.
Even seemingly worthless belongings can be included in the estate plan. In addition, the process of doing estate planning is simple and doesn’t require expensive investments.
Estate Planning Only Covers Belongings and Property
Some people believe that an estate plan only involves property and belongings. This isn’t true since estate planning also covers other issues that are of a personal nature.
An estate plan can determine the person responsible for taking care of your young children when you die. This isn’t related to the value of your property or belongings. Similarly, the estate plan can provide guidelines about your medical care if you get incapacitated or sick.
One type of will stipulates your medical preferences if you lose the ability to express yourself. Another one identifies your spokesperson once you lose your communication capabilities. These documents are helpful to everyone, including people with very few assets.
Improve Estate Planning by Knowing Common Estate Planning Myths
Unexpected events can cause incapacitation, loss of communication abilities, and even death. If this happens to you, the burden on your family won’t be much if you have already created an estate plan. Nevertheless, you can only create an effective plan if you avoid common estate planning myths.
Planning your finances is a good thing, and that’s why you should read some of our other blogs for more financial management information.