Estate planning mistakes can cause enormous problems for your family. They can cause siblings to fight, they can cause you to pay too much in taxes and they can leave everyone in a state of confusion and chaos after you pass away.
In many cases, people make these mistakes because they hear common estate planning myths and do not realize they contain fundamental inaccuracies. These myths lead them astray and cause problems that they could have easily avoided.
If you started thinking about your own estate planning, here are three different myths you should watch out for:
1. You can do it when you get older
This is perhaps the most common misconception about estate planning. People always want to put it off. Some aim for retirement. Others don’t even have a specific aim; they simply assume they are too young for death to be an imminent concern.
It’s somewhat understandable. When you think of estate planning, you imagine retired grandparents getting ready to leave the house to their kids. That does happen. But the reality is that, with the very real threat of disease and accidents, you may not have as long as you think. It is critical to plan in advance, even when it feels much too far in advance.
2. The smaller assets don’t matter
No matter what your estate contains, you still want the distribution process to go smoothly. Remember, many sibling disagreements actually center around sentimental items. They want things to remember you by, not money. After dividing cash, investments and other significant assets, you still want to split up “minor” assets to keep relationships strong between your heirs.
3. All that matters are material assets
Do not ignore your material assets. That’s a focal point of estate planning, of course. You need to think about real estate, bank accounts, life insurance, investments and much more.
However, you also must consider the other aspects of estate planning, such as using powers of attorney to allow your children to make legal and medical decisions on your behalf. You may also want a health care directive to guide the hands of physicians, instructing them about the treatment options you approve of. After all, your ill health may make communication impossible.
Your own estate planning
Are you interested in doing your estate planning in a way that avoids the myths and creates a plan you can trust for your family’s future? If so, make sure you know exactly what legal steps you need to take. This is an important process, and it is wise to give it the thought and effort it deserves.