Myth: An idea or story believed by many people that is not true
Reality: The true situation, the real situation
What follows are twenty-one of the estate planning myths estate planning attorneys encounter on a regular basis. These myths are followed by the reality behind such myths. I will explain why the myths are untrue. While not every person has heard (or believed) every one of these estate planning myths, I’ve rarely encountered someone who has not heard, believed, or even espoused at least some of these misconceptions.
Myth 1: “I don’t have an estate.”
Reality: If you own anything, you DO have an estate.
Myth 2: “This stuff is just for old people.”
Reality: If you have any property or people you care about, you ARE old enough to consider estate planning. This is ESPECIALLY true if you have minor and/or special needs children or other dependents.
Myth 3: “I am too old to do estate planning.”
Reality: If you’re reading this, you’re probably not dead…:), so there is still time!
Myth 4: “This is just death planning and I’m not ready to pick out my casket.”
Reality: Estate planning is Life Planning.
Myth 5: “I can and should do it myself.”
Reality: This is NOT do-it-yourself stuff!!
Myth 6: “I should just put my child’s name on the deed to my home and thereby avoid probate.”
Reality: You can do this, but it most likely is NOT the right decision for you and your family because it will likely lead to undesired and unintended results.
Myth 7: “Estate planning is only for the wealthy.”
Reality: Estate planning is actually more important and relevant for “regular” folks.
Myth 8: “I can’t afford to hire an attorney.”
Reality: You can probably afford what you deem to be important and NOT hiring an attorney may eventually cost you, your loved ones and/or your estate FAR more in the end.
Myth 9: “I will have to give up control over my property.”
Reality: You determine the details of your estate plan.
Myth 10: “This would make my life too complicated.”
Reality: For most people, it is just “business as usual” after they have implemented their new estate plan.
Myth 11: “It is not worth the trouble and expense of dealing with an attorney.”
Reality: If you choose the right attorney, estate planning should be a pleasant and enjoyable process and in the end, you may end up saving FAR MORE money with the attorney than what it would cost to do it yourself!
Myth 12: “My best option is to simply download some forms from the Internet.”
Reality: If you perform your own surgery form a YouTube video, then feel free to follow the same approach with your estate plan. Otherwise, this may not be the best approach.
Myth 13: “The 2 page trust I copied from my grandmother is good enough for me.”
Reality: If you’re also ok with your grandmother’s clothes, then her trust should also “fit” you just fine.
Myth 14: “My 15 year old estate plan, all covered with dusty, should do the trick.”
Reality: If your estate plan is more than 5 years old, it is almost certainly out of date and perhaps worthless.
Myth 15: “I have a nice estate planning binder and even though I never completed the process of transferring my assets into my trust (nor did my attorney complete that process), that’s not really important.”
Reality: If your assets are not legally transferred into your trust, you are sitting on a VERY expensive stack of papers—your trust is worthless and totally ineffective.
Myth 16: “I have a Will, which is all I need.”
Reality: You may be right, as long as you understand and are willing to accept the limitations of a Will-based plan.
Myth 17: “I have a Power of Attorney, so my estate plan is complete.”
Reality: Be VERY careful here. A Power of Attorney can serve a useful purpose, but it can also be a VERY dangerous thing!
Myth 18: “Instead of estate planning, I will just take care of everything through account beneficiary designations.”
Reality: Beneficiary designations might work for some of your assets, but will not work for other assets.
Myth 19: “I have read about bullet proof, offshore, asset protection trusts on the Internet and those seem like a ‘magic bullet’ and something I should pursue.”
Reality: If something sounds too good to be true, it probably is and this has direct application with regard to much of the “noise” about asset protection.
Myth 20: “ I’ll be dead, so why should I care?”
Reality: This might seem like a good point and perhaps you are right that YOU won’t care. On the other hand, those that you leave behind will likely care very much!
Myth 21: “ My family will do the right thing”
Reality: Few of us are as angelic as our parents believe.