One of the reasons that far too many people don’t take care of their basic estate planning needs is that they hold common misconceptions about what estate planning is, how it works, and whether they need to worry about it. Below, we will take a closer look at four common estate planning myths that can hurt your plans for the future and your surviving family members.
Myth #1: I don’t need to worry about estate planning yet.
Many people don’t think they need to do any estate planning until they are old and gray – or at least until they are retired. This simply isn’t the case for many families. If you have assets, you will want to plan your estate to make sure that they go to the right people and places after your passing. If you have dependents, you want to make sure they have financial support. If you have minor children, you want to make sure you recommend them an appropriate guardian.
And people of all ages and all income brackets should consider estate planning so that they can decide who and how people make healthcare decisions for them if they become very ill or incapacitated.
Myth #2: I don’t have enough money to do any estate planning.
Again, estate planning isn’t always just about protecting your money from estate taxes or deciding who will inherit your yacht. It is also about bequeathing your pieces of property (from your car to your wedding ring), making certain your wishes are clear (such as your memorial service and funeral preferences), and making sure your loved ones are cared for (perhaps through a life insurance plan). In addition, it is about healthcare directives that can significantly affect how you are treated in the event of a serious accident or illness.
Myth #3: I don’t have enough money to worry about estate taxes.
When it comes to the federal estate tax, you can leave over $5 million before you have to start paying taxes on your assets. This might seem like an enormous amount of money to most people, but many are surprised at their net worth once they start adding their assets together. Remember to include any life insurance policies, the current value of your real estate, your retirement money, your investments and your liquid assets. You may be surprised with the final number.
Myth #4: Once I plan my estate, I am set for life.
Your life, and your estate, is ever changing. Your dependents may change, your assets may change, and your views on life might change. Especially if you begin estate planning early (which you should), you will probably have to review and update your plan several times during the course of your life.
A knowledgeable and skilled estate planning lawyer can make certain that you aren’t affected by any of the common myths and misconceptions surrounding estate planning and end-of-life planning. Janet Brewer has over 20 years of experience helping her clients plan their estates, both in California and abroad.
To learn more about estate planning in California, or to schedule a meeting with an experienced Palo Alto estate planning attorney, please call The Law Office of Janet Brewer today: (650) 325-8276.