Estate planning can be an intimidating prospect for anyone new to the concept. That can make it easy to fall victim to one of the many common estate planning myths that exist. To help prevent that from happening, the estate planning lawyers at Nash Bean Ford & Brown, LLP explain five of the most common estate planning myths.
Myth #1 – You Do Not Need an Estate Plan Yet
One of the biggest estate planning myths is the idea that you need to reach a certain point in your life or you need to achieve a certain material success before the need for an estate plan really kicks in. While it is true that as your family and your estate grow, you will need to build on your basic estate plan to accommodate that growth, every adult should have at least a basic estate plan in place. A basic plan, usually consisting of a Last Will and Testament and one or two other estate planning documents, prevents you from leaving behind an intestate estate should something happen to you. It also allows you to decide who will oversee the probate of your estate and provides you with the only official opportunity you have to let a judge know who you would want to be the guardian for your minor children if one is ever needed.
Myth #2 – You Do Not Need to Worry about Incapacity until You Are Older
Incapacity is not limited to old age. You stand a one in five chance of suffering a period of disability lasting five months or more prior to reaching retirement age. If you do suffer a period of incapacity, who will make personal and healthcare decisions for you? Who will take over control of your assets and finances? Absent an incapacity plan a judge may be the one answering those questions – and you may not like the answers.
Myth #3 – Appointing Friends or Family Members to Fiduciary Positions Makes Sense
Throughout your estate plan you will likely have several opportunities to appoint people to fiduciary positions. The Executor of your estate, the Trustee of a trust, and an Agent in a Power of Attorney are all examples of fiduciary positions. While your initial thought may be to appoint a spouse, friend, or family member to one of these positions based solely on the fact that you trust that person, take some time to think about the duties and responsibilities of the position before making your final choice. Fiduciary positions often require legal and financial knowledge and experience that a spouse/friend/family members doesn’t have, making them a poor choice for the position after careful thought.
Myth #4 – Once Your Estate Plan Is in Place, You Are Done
As your life changes, so should your estate plan. As you grow and change, so should your plan. During your working years you should routinely review and revise your estate plan every three to five years. Once you retire you can stretch that to every five to eight years. Certain life events also call for a more immediate revision of your estate plan. Marriage or divorce, for example, should prompt an immediate update to your plan as should things such as retirement, a move to a new state, the birth of a child, or the death of a fiduciary.
Myth #5 – The Details of Your Estate Plan Should Remain Private
Sometimes it is wise to keep your estate plan details to yourself; however, when beneficiaries and/or heirs are surprised about the terms of an estate plan, their first reaction is often to contest the Will or otherwise initiate litigation. Discussing the basic terms of your with loved ones is one way to decrease the likelihood of disputes during the probate of your estate. Drafting a “Letter of Instruction” is another option. A Letter of Instructions is simply a letter that you include with your estate plan that includes additional information not found elsewhere in your plan. In this case, the letter might offer explanations for the decisions you made in your estate plan, making litigation less likely.
Contact Estate Planning Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have questions or concerns about estate planning, contact the experienced estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.