Estate Plan Myths You Can Overcome (part 2 of our series)
In our first blog post about common estate plan myths we covered two important and problematic financial misconceptions that hold people back from making an estate plan, but sometimes the estate plan myths that are hardest to beat have to do with assumptions about time and relationships.
Myth #3-“I will get to my estate plan later”
According to a Rocket Lawyer poll, 57% of Americans say that their excuse for not having an estate plan is that they “just haven’t gotten around to making one.”
Remember that the term “better late than never” DOES NOT apply to estate planning! Estate plans are for all ages, and people in every walk of life. Whether you are a young parent, in your 50’s, or even in your 90’s, an estate plan is necessary. If you have young children, an estate plan can help your family members know your wishes for your children after you pass away. This includes who would be their guardian, who they would live with, and who would be in control of financial decisions for your children. Special provisions can also be made for the pets that have become a part of your family. If you are in your 90’s an estate plan will be crucial for helping family members know what types of life saving procedures you do or do not want. The importance of this is not something that should ever be overlooked.
At the very least, having an estate plan is a way to reduce the familial stress when you are no longer in a position to make decisions. Instead of fighting with each other over what you would have wanted, your family will have clear instructions on what you want. Instead of fighting legal battles in court, they should be focusing on you, your health, and your future. It is also important to give copies of your health power of attorney, living will, and instructions on how to handle your remains to your primary care provider.
Myth #4-“ I don’t need to think about ‘what-if’ scenarios”
In life, anything can and will happen. It is important to be prepared for any situation that may arise and make sure it is included in your estate plan. One common scenario is second marriages. Often disputes arise between the second spouse and children from the first marriage when there is no clear plan of who is entitled to which assets. Having an estate plan can protect your children if you die first, so your second spouse doesn’t leave them with nothing. An estate plan can also protect your spouse and children from lawsuits and unscrupulous ‘friends’.
Your Will is a living breathing document. You cannot just create it and forget about it. Deaths, births, divorces, changes in financial situations, and changes in estate planning and tax law may make you want to revise your estate plan as needed. Additionally, continuously update all of your life insurance policies and retirement accounts. These accounts are not administered through a will or trust. Whoever is named on the beneficiary form will receive the money so you want to make sure that the death benefit goes to the loved one you intended.
Myth #5-“It doesn’t matter who I name as my trustee or personal representative”
Selecting the person that will be in charge of your affairs is no small task. This is a decision that requires a lot of thought. You do not want to choose someone for an arbitrary reason, like going with the oldest child simply because he is the first born. It is important to choose the person that is most likely to be up to completing the task competently. The trustee or personal representative will be managing your money, as well as your family’s well-being. Make sure that you discuss what this responsibility entails, that all parties are on board, and that you have contingencies in place if that person doesn’t live up to the expectations.
Other Estate Plan Myths Might Be Holding You Back
Whatever position you are in, in life, do not let estate plan myths cause you to put off creating an estate plan. It will protect you and your interests in the event you cannot make decisions for yourself. It will also protect your loved ones after you pass away. Right now is the time to create your estate plan-waiting could be costly!