In our last post, we outlined four common myths surrounding estate planning in California. Today, we’ll look at four more common misconceptions that we hear in our office from individuals new to estate planning.
Myth #5: Without a will or trust, my loved ones will never inherit my assets.
If you die without drafting a will or trust, the government does not seize your property. However, your state of residence will decide who receives your assets during the probate process and it may take an extended period of time for them to access your property and funds. In addition, depending on your situation, your family may receive less of your money because you failed to protect it from taxes and fees.
Myth #6: I will have to sell my family’s house in order to pay estate taxes.
Many people are concerned that their loved ones will have to sell their home, business, or other liquid property in order to pay estate taxes after your death. While this could be true in some limited cases, you should know that estate planners have several solutions for avoiding this outcome. For example, you could purchase a life insurance plan that would pay your estate taxes or create a trust. A qualified estate planner can review your assets, ask you about your preferences, and come up with a workable plan for you that will not involve selling off your meaningful property.
Myth #7: Estate planning only consists of writing a will and setting up a trust.
Estate planning encompasses far more than writing a will and trying to protect your assets. A good estate planner will coordinate all of your long-term and end-of-life plans, which might include life insurance plans, retirement plans, funeral plans, and heath care plans. Having all of these aspects of your life working in tandem will ensure that you are taken care of before your death and that your loved ones and assets are properly taken care of after your death.
Myth #8: If I have set up a trust, my money is absolutely protected from estate taxes.
Trusts are an excellent way to reduce your estate taxes or delay your estate taxes. In some cases, you can even eliminate estate taxes altogether by setting up a trust. However, it is important to understand that it is certainly not as simply as setting up a trust and avoiding all taxes. An experienced estate tax attorney can help you understand the benefits of trusts in the context of your financial situation.
Begin Estate Planning Today With The Law Office of Janet Brewer
We are here to help dispel these myths and help Palo Alto families get their estates in order efficiently and correctly. To learn more about estate planning in California, call The Law Office of Janet Brewer today: (650) 325-8276.