Surveys indicate that fewer than half of all adults in the United States have an estate plan in place even though most people acknowledge the importance of estate planning. One reason for this puzzling disparity is that people frequently rely on myths and misconceptions when they think about creating an estate plan. To help ensure that you, your assets, and your loved ones are protected, a Murfreesboro estate planning attorney at Bennett | Michael | Hornsby discusses common estate planning myths and misconceptions.
- Age and Wealth Do Not Determine the Need for an Estate Plan. People often believe that they need to reach a certain point in their life or need to achieve a certain material success before estate planning becomes important. While it is true that as your family and your estate grow, you will need to build on your basic estate plan to accommodate that growth, every adult should have at least a basic estate plan in place. A basic plan prevents you from leaving behind an intestate estate, allows you to decide who will oversee the probate of your estate, and provides you with the only official opportunity available to let a judge know whom you would want to be the guardian for your minor children if one is ever needed. For these reasons (and others) every adult should have an estate plan.
- Age Does Not Determine the Need for an Incapacity Plan. Another common misconception is that incapacity only happens to “older” people. That myth leads people to believe that an incapacity planning component is not necessary when they are young. What you need to know is that you stand a one in five chance of suffering a period of disability lasting five months or more prior to reaching retirement age. If you do suffer a period of incapacity, someone will need to make personal and healthcare decisions for you as well as take over control of your assets and finances. Without an incapacity plan within your estate plan a judge will decide who makes those decisions and controls your assets.
- Just because you trust a friend or family member does not make them the right choice for a fiduciary position. Throughout your estate plan, you will likely have several opportunities to appoint people to fiduciary positions. The Executor of your estate, the Trustee of a trust, and an Agent in a Power of Attorney are all examples of fiduciary positions. Appointing a spouse, friend, or family member to one of these positions based solely on the fact that you trust that person is a common mistake. Before you make it, be sure you understand the duties and responsibilities of the position, many of which require legal and financial knowledge and experience that a spouse/friend/family member doesn’t have.
- Keeping the details of your estate plan private may not be the best choice. You may have reasons why you want to keep the details of your estate plan to yourself; however, surprised heirs/beneficiaries are more likely to initiate litigation. To decrease the likelihood of expensive and time-consuming litigation, you may wish to consider discussing the basic terms of your plan with loved ones. Another option is to include a “Letter of Instruction” with your estate plan. A Letter of Instructions is simply a letter that provides additional information not found elsewhere in your plan, such as an explanation for why you made the choices you made within your estate plan.
- As your life changes, so should your estate plan. As you grow and change, so should your plan. During your working years, you should routinely review and revise your estate plan every three to five years. Once you retire you can stretch that to every five to eight years. Certain life events also call for a more immediate revision of your estate plan. Marriage or divorce, for example, should prompt an immediate update to your plan as should things such as retirement, a move to a new state, the birth of a child, or the death of a fiduciary.
Contact a Murfreesboro Estate Planning Attorney
If you have additional questions or concerns regarding estate planning, consult with an experienced Murfreesboro estate planning attorney at Bennett | Michael | Hornsby as soon as possible. Contact the team today by calling 615-898-1560 to schedule your free appointment.