Busting 8 Estate Planning Myths
Posted by Ocean Wealth
Quite frequently, we see individuals and families choosing to forgo setting up an estate plan for a combination of these myths. Unfortunately, it seems like people believe estate planning and financial planning to be two separate entities, specially reserved for certain people and specific situations. So, let's set the record straight.
Myth #1: Estate planning is only for the rich and famous.
Estate planning is for anyone with assets and beneficiaries. It’s comprised of three main parts:
- Last Will and Testament
- Power of Attorney
- Advanced Healthcare Directive
If you're a person that could potentially become ill or unable to make medical decisions, estate planning is for you. If you own anything of value, estate planning is for you. If you have loved ones who would be affected by your passing, estate planning is for you.
Myth #2: My family gets along fine, there won't be any issues.
Even the most functional of families can end up in ruin without proper estate planning. An estate plan will handle anything from:
Who is to care for your children and dependants should you pass,
- Who is to get your assets when you're gone,
- The care of your pets, and
- What decisions to make in specific medical scenarios.
Your estate plan is your chance to communicate your wishes. You may think it's obvious who should get your house or your collection of model cars, but there could be more than one individual who feels entitled. The courts will not always settle things the way you hoped.
Myth #3: I’m too young for an estate plan.
For the most part, we're all aware of our limited time on this earth. Most of us have loved ones, an estate with assets, and a general idea of what we want to happen should we fall ill. Putting a plan in place as soon as possible is the best gift you can give yourself and your loved ones.
Myth #4: I don't have any beneficiaries or loved ones, so it doesn't matter.
It still matters. You always have someone or a cause that’s dear to your heart. Your estate plan will outline if you want to donate all your investments or property to a charity or university. Perhaps you want to leave something for a student or a particularly helpful care aid. This is all part of estate planning.
Myth #5: I don't need to tell anyone about my estate plan.
We've seen it before. A client has an estate plan set up as part of their financial planning process but tells no one. When they pass, their assets are divided up, and some investments are never claimed because no one knew about them. Always communicate with those who will be affected — this can also make the planning process more manageable.
Myth #6: I can do my estate planning on my own.
Estate planning involves a lot of moving parts and scenarios to consider. Doing this all on your own can be overwhelming and lead to missing key aspects. You're going to need help from a financial advisor and estate planner as these experts understand the legalities involved in taxes, trusts, and wills.
Myth #7: I only need to do my estate plan once.
Estate planning is not a “set it and forget it” deal. Your life will change dramatically over the years. Perhaps you have grandchildren, remarry, or purchase more property. Your estate plan will need to be updated periodically to reflect your current estate and wishes accurately.
Myth #8: Estate planning is only about distributing assets.
As we've said before, estate planning is about the distribution of assets. However, it's also about your wishes in certain medical situations and your preferences for your end-of-life plan and beneficiaries. It's important to note that some assets sit outside of your will and should be considered and accounted for through other methods.
Estate planning is a crucial part of financial planning. Your financial life doesn’t end when your life does; it continues and affects those you leave behind. Proper estate planning is something that all adults should be considering — probably much sooner than you think.
Don't let myths become facts in your mind. If you're wondering how to go about setting up your estate plan, our team is here to help. Reach out today, and let's start planning for your future and the future of your loved ones.