While there is a great deal of misinformation surrounding estate planning, the fact of the matter is everyone could benefit from having an end-of-life plan in place. Without one, state laws will dictate what happens to all of your belongings – and how much of your estate your beneficiaries should receive.
If you wish to have a say in how your legacy is handled, an estate plan can give you security and peace of mind. Here are some of the more common myths regarding estate planning and the realities behind them:
1. A will is all you need
While a will does outline the distribution of your assets, the document does have some limitations. A will only gives an individual control over assets that are solely in that person’s names. A will does not have any power over joint accounts or accounts with beneficiaries on them. Depending on your circumstances, you may consider expanding your estate portfolio to include more than just a will.
2. Estate planning is just about assets
Estate planning is about more than just dividing assets. When planning for end-of-life, you’ll also want to consider protections for your health and state of mind. A living will, for example, lays out the type of medical treatments you want in specific scenarios. A durable power of attorney appoints a trusted person to make medical decisions for you in the event of incapacitation.
3. You can always make a better will later
Estate planning is likely low on your to-do list, especially if you are otherwise young and healthy. However, it’s crucial to be proactive and establish guidelines now to ensure your family has instructions if an unexpected event occurs. If you have children, it’s essential to name a guardian in your will sooner rather than later so that you are always prepared for worst case scenarios.
4. You can’t change an estate plan after you make one
On the contrary, you should plan on reviewing or revising your estate plan every three to five years or when a major life event occurs. Your salary and family dynamics are prone to change over time, which could ultimately impact your estate plan. You may have a new member of the family you want to include in your plan or remove a beneficiary who has passed away.
Planning for your end-of-life may not be your idea of a good time, but don’t let common misconceptions prevent you from being proactive. Creating an estate plan today will ensure your family and assets are safe no matter what life throws your way.
