At AmeriEstate, we get numerous questions about why we recommend estate planning to our clients. There are misconceptions about what one is and why having one is an important measure for protecting assets. We want to dispel the most common estate planning myths, so you can make informed decisions when planning for the future.
I Am Not Wealthy Enough To Need an Estate Plan
The most common myth we hear is that estate plans are only for those with significant assets. You don’t need to be wealthy to benefit from an estate plan. If you have investments with a value higher than $150,000, they will automatically go to probate unless you protect them. The probate cost is at least 10% of the asset’s gross value. When levying these fees, the government doesn’t consider debts, including mortgages.
I Have Plenty of Time To Establish an Estate Plan
It is never too soon to create an estate plan. Even while you are still alive, estate plans protect you and your assets. Unfortunately, no one is entirely safe from unexpected accidents and illnesses. A solid plan includes powers of attorney for financial and health decisions should you become incapacitated. If a tragedy leads to an untimely death, your family members will face difficult decisions and financial hardships if you don’t have an estate plan that spells out your wishes using legally binding documents. There are no downsides to creating an estate plan early, because you can always make changes to it throughout the rest of your life.
I Have a Will, so I Don’t Need an Estate Plan
If you are like many, you may believe a will is sufficient to protect your assets and ensure your wishes are followed after you pass. The truth is that wills do not prevent probate if your assets are worth more than $150,000. In addition to court costs, probate can take months or years, especially if someone contests your will.
I Can Just Add My Children to My Assets
While you can certainly add children to your assets, doing so leaves you and your children at risk of unexpected financial burdens. While you are still alive, you could lose your assets to your children’s creditors should they get into financial trouble. You also lose control over your investments, as you give your children decision-making rights when you add them to titles and accounts. After you pass, if your children sell any of the assets, they may incur capital gains taxes.
My Children Have a Godparent and Don’t Need a Legal Guardian
Godparents provide your children with a valuable relationship. However, states do not recognize them as legal guardians. If you have young children or children with disabilities, you can establish legal guardianship through an estate plan.
I Trust My Children To Divide My Assets Fairly
Without legal trusts, the courts will decide how to divide your assets, not your children, even if you have a will. No matter how trustworthy your heirs are, you need legally binding protection to prevent probate.
Creating an Estate Plan Is Too Expensive
Probate is much more expensive than developing an estate plan with AmeriEstate. Our mission is to provide personalized, affordable estate planning services with a 100% satisfaction guarantee. Contact us today for a free estate planning consultation.