According to the Estate Planners’ Council, more than 50 percent of North Americans have not made plans for their estate. In recognition of Estate Planning Awareness Week, Home Care Assistance aims to motivate people to embrace and proactively approach proper estate planning. Suitable planning includes attention to saving money, investing wisely and planning for all possible contingencies in your future.
To help your planning efforts, we are sharing tips and ideas that debunk many common myths that exist regarding financial and estate planning.
MYTH: Only the rich should plan for the future. If you have any assets at all, you should plan for the future. It is important to note that plans you make will not only impact what happens to your assets when you pass, but they will also dictate your wishes in the event of incapacitation. If your health takes a sudden turn, how will your family manage and allocate your assets to assist in recovery and rehabilitation? By planning for any possible future scenarios, your assets can be accessed when you need them, even in sickness.
MYTH: Estate planning is planning for my death. Even though estate planning concentrates on the distribution of assets upon death, it’s actually much more than that. By creating documents for estate planning, you’re also planning for end-of-life care, designating a person as a power of attorney and creating an advanced health care directive, and so much more. By creating estate planning documents, you are putting yourself in the driver’s seat of what happens while you’re alive and once your estate is passed on to family member or members.
MYTH: My estate won’t need to go through probate; I have a will. Even though a will is better than not having a formal instrument, depending on the state you live in and the size of your estate, courts may still need to become involved in the distribution of your assets. This can be costly and time consuming, and will become complicated if you own real estate in more than one state.
MYTH: I need a trust to avoid probate court. Trusts typically should be drawn up by legal professionals. However, there are other ways to prevent specific assets being pulled through the probate court for tax purposes. By adding a beneficiary to your bank accounts, either as co-signatory or not, as “payable on death”, you can avoid probate for these financial instruments. Depending on the state where you live, property owned with your spouse will typically transfer without the requirement for court. To be certain, check your state’s law (resources below).
Laws are different in many states and provinces, so we’ve included two online resources that can provide you with more information on how you can protect your family’s assets. Nolo provides probate information by state, while Mystatewill.com allows you to examine how your estate would be handled based on your personal situation (e.g., state you live, married, no living children, etc.).
There are many common misconceptions about estate planning, so it is important to learn more. By being prepared for the future, you can avoid potentially expensive court costs and time-wasting processes for you and your family. In the end, estate planning gives you control and can provide peace of mind with the knowledge that the future is organized according to your wishes.