Estate planning is often viewed as a confusing or esoteric process. This perception is not without merit, as many states have complicated probate and taxation laws.
However, there are some misconceptions that can be easily dispelled. Here are three of the most common estate planning myths debunked.
Estate plans are only for very wealthy people.
Your financial status does not preclude you from needing an estate plan. The vast majority of people have some sort of assets that they should be including. Additionally, physical property is not the only element you can include. You can also designate a power of attorney, create a health care directive and appoint a guardian for your minor children.
I am young and healthy, so I do not need one.
Life is unpredictable and there are no set age limits for health problems or injuries. It is always better to plan ahead of time because you have no way of predicting when you will need an estate plan. Waiting too long may cause you to lose your decision-making power.
I have had an estate plan for years and I do not need to worry about it.
You should review your will or estate plan at least every three to five years. This timeframe is valid if you have had no significant changes occur. However, life events like marriages, births, a move to a new state and buying or selling property may necessitate an update.
It is easy to acknowledge the importance of estate planning when you can identify the fallacies surrounding it.