Estate planning is a complex legal matter. Because of its complexity, many people misunderstand certain aspects of the process.
If you’re considering making an estate plan, you need to be sure you aren’t misinformed about the following issues.
Myth #1: You must be rich to have an estate plan
Truth: It’s commonly believed that people who have a large amount of wealth are the only ones who need estate plans. However, any adult can have an estate plan. Estate planning can help people detail their last wishes so there is no confusion.
Myth #2: You don’t need an estate plan
Truth: If someone dies without a legal will, then they have died intestate. A person who died intestate would have their assets divided among relatives according to state law. The state doesn’t know the deceased’s last wishes without a legal will, so assets may not be distributed according to how the deceased would have wanted.
Myth #3: You can’t have a trust if you have a will
Truth: A will is the most basic legal document of an estate plan. It details a testator’s estate and their beneficiaries. However, a will has a few flaws, such as probate and estate taxes. Many people create trusts to avoid these issues alongside a pour-over will to transfer assets to a trust upon an individual’s death.
Myth #4: Your will can’t be disputed
Truth: While many people believe that their word is final after creating their estate plan, if a family member believes they have a right to more assets, they may be able to dispute a will. They need to provide evidence of things such as influence or forgery.
That’s one reason why it’s wise to discuss your estate plan, at least in broad strokes, with your family while you’re still around. It’s also wise to have sound legal guidance. This can help you prevent disputes and other problems.