4 Myths About Estate Planning Busted
There are lots of myths about estate planning, but here are four that are the most widespread.
Myth #1: If I become incapacitated my spouse automatically becomes the person in charge of all of my health care and financial decisions.
Busted: This is sometimes the case, but based on how your assets are titled and state law your spouse may or may not be able to take over your financial decisions and health care decisions. Besides, you may be in the same car accident. You need a plan that includes powers of attorneys and health care directives to make sure the right people are in charge of your health care and financial decisions.
Myth #2: I have told my family what I want, they will be able take care of my wishes the way that I told them to.
Busted: This is the opposite of true. When it comes to your assets after you have passed away, those will be divided the way the law determines if there is not a written document properly executed that says differently. In California, the legislature has made rules that they feel would most likely approximate what a person would want to happen to their property when they pass. These are the rules that will govern if you simply tell your family what you want.
Myth #3: I made a will once, I don't need to go through that process again.
Busted: Here, in the state of California, most people want and need a trust (not a will). But aside from updating to a trust, an estate plan is a living document. You cannot set up the estate plan once and assume that it will continue to carry out your wishes five, ten, twenty years later. Children grow, siblings pass, friends become acquaintances. The people that you put in charge of your estate twenty or fifteen years ago may not be willing or able to do the job any more.
Myth #4: I am not wealthy, I don't need an estate plan.
Busted: This could not be further from the truth. The smaller the estate, the greater the percentage of the estate that will be taken for administrative costs, like going through probate. It is imperative that those with smaller estates take the necessary steps to make sure that their minor children will be provided for should something happen to them while they are young. A lot of heart ache and sadness could be avoided if those with less wealth planned their estate so what they have worked for is expeditiously cared for without waste.
Please give us a call to talk about the right estate plan for you at (951)304-3431.