There’s a lot of misinformation floating around about estate planning. Urban legends and myths grow out of someone’s exaggerated story and can affect countless other people by misleading them.
Half-truths and hyperbole take on a life of their own and have come to dominate the way people think about estate planning. If you believe any of the widespread estate-planning myths below, you may want to reconsider how you structured your estate plan or why you keep putting off planning for so long.
Myth #1: Young people don’t need estate plans
Many people seem to think that only those at or past the age of retirement need estate plans. While those growing older are more likely to have health issues that could claim their lives, people can die unexpectedly at any age. If you have people who depend on you or any valuable property of your own, you likely want an estate plan to protect them and your legacy.
Myth #2 Trusts are tools only for the ridiculously rich
People too often associate trusts with the inheritances of privileged people. However, trusts are not just tools for those with millions of dollars worth of personal property.
Trusts can help those with special needs family members, with complicated family circumstances or with unique legacy wishes, like charitable giving. Trusts can also protect people who need government insurance benefits when they get older, or who worry about creditors or taxes depleting their estate.
Myth #3 The people who love you will handle your estate with dignity and respect
You probably want to expect the best of the people that are closest to you. Assuming that your family will fairly and reasonably split up your property among themselves after you die is a major mistake.
Both money and grief can alter people’s personalities and behavior. People who are usually very generous and compassionate can become greedy, aggressive and vindictive during estate administration. You don’t want your legacy to depend on the goodwill of others. You also don’t want your death to tear apart family relationships.
A written will ensures that your property goes to the people you want to have it and can reduce conflict after you die. A careful estate plan can also reduce the pressure on the people you love when you have health issues or after you die.