Estate planning allows you to plan the distribution of your estate after you pass away.
Unfortunately, you may find information online that may confuse you when making an estate plan. Here’s what you should understand:
Debunking common estate planning myths
Myth 1: It’s better to let the state handle your estate
Truth: If you die intestate, which is the act of dying without an estate plan, then the state will step in to administer your assets. The state likely doesn’t know what your last wishes were, so assets may not go to some beneficiaries.
Myth 2: An estate plan is only good when you’re old
Truth: You’ll have a lot more assets to include in an estate plan once you’re older, but there are things you can benefit from when you’re younger. For example, you could include a power of attorney who would act on your behalf if you’re incapacitated after an accident or medical emergency.
Myth 3: Only the rich should make an estate plan
Truth: Asset distribution is one of the main functions of an estate plan, but the amount of wealth you have shouldn’t affect whether you make one or not.
Myth 4: A will does not have probate
Truth: Trusts and wills are often confused. A will has probate so that the legal document can be reviewed and assets are distributed. While a trust can avoid probate.
Myth 5: It’s better to write your own estate plan
Truth: One way to make an estate plan is by writing it on your own. This may seem like the quickest and cheapest method to make an estate plan, but that doesn’t mean it will be valid. It’s important to understand the law when making a valid estate plan.
Myth 6: Online templates are just as good as any estate plan
Truth: Likewise, you may find an online template that has everything you need for an estate plan. However, these templates are often made without legal knowledge and can include grammatical issues that invalidate them.
Myth 7: You don’t need legal help
Truth: It may be wise to learn about your legal options when making documents that oversee your estate. Each state has unique laws that may not be known simply by looking online.