5 Estate Planning Myths You Need to Be Aware Of in 2020
There are many myths out there about estate planning and this article will address 5 of them. It is important to recognize that falling victim to any of these misconceptions could leave your family in disarray. Planning ahead will save you and your family lots of wasted time, money, and resources.
Myth #1 – Having a Will avoids probate.
Often clients believe that because they have a Will that their Estate will not have to be probated upon their passing. In actuality, having a Will is a ticket to the probate court. Plain and simple—any time someone has a Will, it must go through the probate process in order for the testator’s property to be distributed according to the instructions of the Will.
Myth #2- Out of state residents moving to FL do not need to update their estate planning documents.
Unfortunately, many out of state residents moving to Florida do not update their Estate documents because they had them prepared in their previous home state and thought no more on the matter. Anyone that is moving to Florida from out of state needs to have their estate planning documents reviewed and may need to update their estate planning documents to reflect Florida law. Each State has its own laws and what it considers valid legal language.
Myth #3 – Only senior citizens need estate planning.
There is a misbelief that only senior citizens need to worry about setting up an estate plan—this could not be any further from the truth! There is much more to estate planning rather than just setting up who gets what when you pass and even that is not limited to the senior population. In Florida, anyone over the age of 18 is considered an adult. Every adult needs to have at the minimum certain legal documents in place such as a valid Power of Attorney, a valid legal Health Care Surrogate, and a Living Will in place. After these basics, setting up a Will or Trust may be needed. Each of these documents all serve distinct purposes and importance. This applies to college students, young families, baby boomers and is not just confined to senior citizens. Life is not filled with guarantees that we will live until we are 100 years old, and at any moment any of us could become incapacitated or pass away, regardless if we are young or old.
Myth #4 – A Will and Living Will are the same thing.
Clients will state “I have a Living Will so I do not need a Will.” Little did they know, a Will and Living Will are completely two different documents. To simplify, a Will has to do with money and a Living Will has to do with health. A Will is a legal document instructing to whom your property and monies will be distributed. In addition, you appoint who will be the personal representative or executor of your estate. A Living Will deals with end-of-life decisions determining whether you want to be on any artificial life sustaining devices when you are in a terminal condition, an end-state condition, or a persistent vegetative state.
Myth #5- Estate Planning is only for the wealthy.
Anyone over the age of 18 needs to consider estate planning and not too many young adults are wealthy right out of high school unless they received family inheritances or are successful entrepreneurs. Young adults and families have a lot to benefit from setting up a plan and updating it every few years regardless of how much they have in their accounts or how many valuables they own. Clients will say “I am not wealthy and do not want to set up an estate plan because the state of Florida by default will distribute my assets without me having to do anything.” While this is true, the intestacy laws of the state will dictate who gets what—usually your spouse, followed by your children, and if you have neither then to your parents, followed by your siblings. But, how the State of Florida would distribute your assets is not always how you would have distributed them.
Planning ahead can save you, your family, and friends lots of time and frustration. Talk to an estate planning attorney to set up a plan that is relevant to your circumstances.