October 21-27 is National Estate Planning Awareness Week, which means it's time to shed light on this often misunderstood and frequently avoided topic. You might think estate planning is only for the wealthy or too complicated and expensive. These are just a few myths surrounding estate planning that I hear often. In reality, estate planning is critical for everyone, including you, regardless of age or financial status.
Many people don’t really understand what estate planning is - even attorneys sometimes don’t really understand it. So, I’ll take this opportunity to set the record straight and debunk some common myths, then explore why you need an estate plan, and how to get the right one, at the right price.
Myth 1: Estate Planning is Only for the Wealthy
One of the most persistent myths about estate planning is that it's only necessary if you have significant wealth or valuable assets. This couldn't be further from the truth. Estate planning isn't about the size of your estate; it's about making sure that when something happens to you - as it will - the people you love aren’t left with a big mess to deal with. Consider this: Do you have a bank account? A car? Personal belongings with sentimental value? A life insurance policy? If you answered yes to any of these, you have an estate. But even more importantly, do you have people you care about? Family members who depend on you? Or people you love who are going to be stuck dealing with your mess, if you don’t take care of these things while you can. If so, you need an estate plan.
Estate planning isn't just about distributing assets. It's about making important decisions that will affect your loved ones. For instance:
- Who will take care of your minor children if something happens to you? And, how will they take care of them?
- Who will make medical decisions on your behalf if you're incapacitated? And, how will they make those decisions?
- Who will manage your digital assets, like email, social media accounts or cryptocurrency?
- Who will make sure your bills get paid?
These questions apply to everyone, regardless of their net worth. By creating an estate plan, you're not flaunting wealth; you're taking responsibility for your life and the people you care about. After all, someone will have to deal with these things. It’s unavoidable. You can do it now and make it easy on your loved ones (and have more control over outcomes), or you can procrastinate it or avoid it altogether, and leave the people you love with a complicated and expensive mess to clean up, if you become incapacitated or after you die.
Myth 2: Estate Planning is Complicated and Expensive
Another common misconception is that estate planning is an overly complex and costly process. While it's true that estate planning involves legal documents and careful consideration, it doesn't have to be overwhelming or break the bank. In fact, we promise to make it as easy as possible for you, at the right budget based on your family dynamics, assets, and needs.
The complexity and cost of your estate plan will depend on your specific situation and goals. Our Life & Legacy Planning process is specifically designed to start with getting you educated and organized, so we can support you to choose the right plan for you and your loved ones.
You can either start with one of our educational presentations or a 15-minute call with our office. From there, we guide you through a Planning Session that will have you relieved at how educated you are. We often hear afterwards, “wow, if I knew I would feel this great after our Session, I would have done this much sooner. I didn’t know working with a lawyer could feel like this.” One of the main purposes of the Planning Session is to look at the cost of the “state’s plan” or your current plan (if you created a will or a trust in the past), and to ensure you are 100% clear about what would happen, if you become incapacitated or when you die. And, then, we look at exactly what you would want, and the cost to create a plan that meets your wishes. You are then able to make an informed, educated decision about what you want to do for yourself, and the people you love.
When you consider the peace of mind and potential savings in time, stress, and money for your loved ones down the line, Life & Legacy Planning is often the best way to save your loved ones time and money, while also creating optimal value and use of your resources, during your own lifetime. Think of it as insurance for your legacy – a small cost now can save your loved ones significant trouble and expense later.
Myth 3: I'm Too Young to Need an Estate Plan
You might think estate planning is something you can put off until you're older, but this is a dangerous assumption. Life is unpredictable, and having an estate plan in place is crucial regardless of your age.
If you're a young adult, you might not have accumulated much wealth yet, but you still have important decisions to make. For instance:
- Who will manage your social media accounts if something happens to you?
- Who will take care of your pets?
- If you have a small business or side hustle, what will happen to it?
- Who will be responsible for paying off your student loans or other debts?
Moreover, estate planning becomes even more critical if you're a young parent. Your estate plan can designate guardians for your children and set up trusts to manage any assets they might inherit. Without these provisions, the court may have to decide who raises your children, leading to family disputes and potentially placing your children with someone you wouldn't have chosen.
Even if you're single with no dependents, an estate plan is critical, maybe even more so because it’s up to you to determine who will care for you, if you cannot care for yourself. You really don’t want to leave that to a judge to decide. Your plan will ensure your wishes are respected if you become incapacitated, designate who will make medical decisions for you, and specify how you want your assets distributed. This can prevent potential conflicts among family members and ensure your hard-earned assets go to the people or causes you care about most.
Remember, estate planning isn't about planning for your death; it's about planning for life, and the uncertainties sure to come. It's about taking control of your future and caring for the people and things you love, no matter your age.
Myth 4: Once I Create an Estate Plan, I'm Done
Another common misconception is that estate planning is a one-time event. In reality, your estate plan should evolve as your life changes. Major life events that might necessitate updates to your estate plan include:
- Marriage or divorce
- Birth or adoption of children
- Death of a beneficiary or executor
- Significant changes in your financial situation
- Purchase of a home or other major asset
- Starting a business
- Moving to a different state
Even if you haven't experienced any major life changes, it's important to review your estate plan at least every three years, though we recommend you review your assets and how they are titled, annually. Laws change, and what was optimal a few years ago might not be the best strategy now. For example, the Tax Cuts and Jobs Act of 2017 significantly increased the federal estate tax exemption. If your estate plan was created before this change, it might need adjusting to take advantage of the new tax laws.
Regular reviews also give you a chance to reconsider your choices. Maybe the person you initially chose as your children's guardian is no longer the best fit. Or perhaps your financial situation has improved, and you'd like to include charitable giving in your estate plan.
Keeping your estate plan up-to-date ensures it continues to reflect your wishes and provides the best possible protection for your loved ones. Think of it as a living document that grows and changes with you, rather than a static set of instructions. It’s so important that we include regular reviews at least every three years in all our Life & Legacy Plans, and have systems to keep your plan up to date.
As we observe National Estate Planning Awareness Week, it's time to move past these myths and recognize the true value of estate planning. It's not a luxury for the wealthy, a complex process beyond your reach, or something you can put off until later in life. It's a fundamental aspect of responsible financial planning that everyone should consider. By creating and maintaining an estate plan, you're taking control of your legacy, ensuring your wishes are respected, and providing invaluable peace of mind for yourself and your loved ones. Don't let misconceptions hold you back – consult with a qualified estate planning attorney today and take the first step towards securing your future.
How We Help You Take Action Today
Don't let common estate planning myths prevent you from securing your future. As a Personal Family LawyerⓇ Firm, we help you create a comprehensive Life & Legacy Plan that goes beyond basic estate planning. We'll outline strategies for your assets, prepare for potential incapacity, and ensure your family is cared for, even if the unexpected happens. Our approach includes regular reviews to keep your plan current with life changes, and we even help capture family memories and traditions. With our guidance, you can rest easy knowing your wishes will be honored, your loved ones cared for, and your property protected.
Take the first step towards peace of mind. Schedule a complimentary 15-minute consultation and learn how we can help you create your personalized Life & Legacy Plan.