[This post was inspired by a similar article by Catherine Hodder, Esq. on the "Sand Gen Life" blog. It has been adapted with the author's permission.]
According to a 2015 Harris poll, 64% of Americans don’t have a Will. Why? Maybe it's just procrastination, or maybe it's the fact that there are a lot of myths about estate planning. Very likely, it's a combination of both.
Yet estate planning is not nearly as scary as some people believe it to be. So to help put your mind at ease, here are the 12 most common estate planning myths, debunked.
Myth #1: If I have a Will, I can avoid probate.
Having a Will does NOT avoid probate. If you die with a Will, that document must be filed in court along with a probate petition, verified and validated by the court, creditors paid, assets inventoried, and all the other wonderful parts of probate completed before your heirs get anything. While there are ways to avoid probate, merely having a Will is not one of them.
Myth #2: Estate planning is only for the wealthy.
Remember our definition of estate planning: An estate plan says what happens to your STUFF when you die and who takes care of your SELF when you become incapacitated. So even if you do not have many assets, an estate plan can be beneficial to provide for your (or a loved one's) medical care or for the care of your children in the event something happens to you.
Myth #3: My spouse will get everything anyway.
It is true that, barring a valid prenuptial agreement or other ownership issues (and assuming you have no children), your spouse will be entitled to your estate after your death. However, your spouse will likely still need to go through the probate process to get those assets. A well-crafted estate plan for married couples can avoid the need for probate.
Additionally, your spouse (or, if your spouse dies before you, another representative) does not automatically (both legally and/or practically) have the ability to make medical decisions for you in the event you cannot do so. They need a Power of Attorney giving them that authority.
Myth #4: My family knows what I want.
You might think they do, but what if they don’t? Do they know where your safe deposit box key is? Do they know how to access your online accounts? And what if there are disagreements among family members? Lack of clarity can lead to a long and messy probate that could be easily avoided with an estate plan and a thoughtful estate planning letter of instruction.
Additionally, your family will need legal documents that give them the ability to make medical decisions for you — their status as a family member will not be enough.
Myth #5: My family situation is too complicated.
Estate planning attorneys often have to un-complicate situations. It is our job to figure out how to make your wishes enforceable, whatever the family relationships involved. An attorney may also be able to point out potential problems you had not contemplated.
You are not just paying an estate planning attorney to prepare documents for you; you are paying them to prepare the best documents for you given your life circumstances.
Myth #6: I’m too young to worry about estate planning.
We have written extensively about the importance of estate planning even if you do not have kids, whether you are single or married. What if you are in an accident and cannot make medical decisions for yourself? What if you have a terminal illness — who would you want to make end-of-life decisions for you, and what would you want them to do? Estate planning is important at all stages of life.
Myth #7: It's too late to start my estate plan.
It is never too late to plan your estate — that is, until it's too late. You can create and change your estate plan as long as you are alive and competent, and you never know when you are going to need the benefit estate planning documents provide. More than anything, having your estate plan gives you peace of mind.
Myth #8: I can do it myself.
"Do It Yourself" estate planning can have disastrous consequences. There is no one-size-fits-all solution to estate planning, which is something DIY legal services choose to ignore. The forms used by these services may not account for your particular family situation, meet the necessary legal requirements, or be executed properly.
In short, you could spend time and money on an estate plan only to have it fall apart and end up in a messy probate. Estate planning calls for a qualified, experienced attorney to help guide you to the best solution.
Myth #9: Without a Will, the state will get my assets.
Although there are laws under which the state can get your assets (a doctrine known as "escheat"), that only happens if you have no other living "heirs-at-law". An heir is someone designated by law to receive your estate in a particular order (and in certain proportions) if you die without an estate plan. Nevertheless, to avoid any possibility of the state getting everything you spent a lifetime building, you should have a well-crafted estate plan.
Myth #10: I don't need to update my estate plan.
Just because you sign estate planning documents does not mean you can forget about them. Laws change, as do life circumstances. And what may be a solid estate plan at one point in your life may not be as strong later in life.
We recommend reviewing your estate plan at least once a year to consider if any changes need to be made. Similarly, we suggest you hold an estate planning "fire drill" and discuss your plan with your family at least once every few years.
Myth #11: If I have an estate plan, I can avoid estate taxes.
If only it were that easy. The federal estate tax exemption has increased to $11.2 million per person (or $22.4 million per married couple), and Oklahoma does not have a separate estate tax, so it is unlikely you will have to pay an estate tax at all.
However, if you are lucky (unlucky?) enough to be near or over the exemption amount, simply placing all your assets in a trust will not avoid estate taxes.
Myth #12: I need to plan a "reading" of my Will.
Movies and TV shows have lied to you. While there may be a family meeting to discuss the disposition of a loved one's estate, there is generally no formal "reading" of the Will. Rather, the executor or trustee of the estate will take the estate plan, contact family members, and take other steps to administer the estate according to those estate planning documents.
Ignore estate planning myths.
Don't let myths scare you into not executing an estate plan. If you wait too long, it might be too late. To discuss what estate planning options are best for you, contact the experienced Oklahoma City estate planning attorneys at Postic & Bates for a free consultation.
Additionally, download our FREE Estate Planning Guide, packed with over 70 pages of information about estate planning, probate, and much, much more:
David M. Postic is an associate attorney at Postic & Bates, P.C. His practice includes estate planning, probate, real estate, adoption, business law, and litigation.
You can email David through our Contact Us page or by calling our office at (405) 691-5080.
[As with all our posts, the contents of this article do not constitute legal advice and are subject to our site-wide disclaimer.]