October is Estate Planning Awareness Month
The importance of proper estate planning shouldn’t be understated, as it can be a lasting gift for your loved ones.
Many people plan their estates diligently, with input from legal, tax and financial professionals.
Others plan earnestly but make mistakes that can potentially affect the transfer of their estate. In fact, we still hear some incorrect assumptions surrounding estate planning. So in honor of Estate Planning Awareness month, we're going to help debunk a few popular myths.
Myth #1: You Can DIY Your Estate Plan
While it may be possible to create a will on your own, it can be risky to do so - especially if your estate is complex. Look at the example of Aretha Franklin. The “Queen of Soul’s” estate, valued at $80 million, may be divided under a handwritten or “holographic” will. The family discovered multiple wills among her personal effects. Provided that the handwritten will can be authenticated, it will be probated under Michigan law, but such unwitnessed documents are not necessarily legally binding.
The greater your estate, the more potential for complexities when passing it on to others. For some with few assets, taking a do-it-yourself approach may be possible. But estate planning, no matter your net worth, can be a complicated process with lots of room for error when done improperly. While, in some cases, you may be able to do it yourself, this is one thing that’s usually best left to an experienced professional.
Myth #2: All You Need Is a Will
While your will may state who your beneficiaries are, those beneficiaries may still have to seek a court order to have assets transferred from your name to theirs. In such a case, those assets won’t lawfully belong to them until the court procedure (known as probate) concludes. Estate planning can include items like adequately prepared and funded trusts, which could help your heirs avoid probate.
Depending on your circumstances, your estate plan may include:
- Life insurance
- Disability insurance
- A living will
- Pre- or post-nuptial agreement
- Long-term care insurance
- Power of attorney
Myth #3: Your Estate Plan Never Needs Updating
Any major life event should prompt you to review your will, trust or other estate planning documents. So should a significant life event that affects one of your beneficiaries.
These events could include (but are not limited to):
- New baby or adoption
- Purchase of significant assets (homes, boats, collectibles, automobiles)
- Death of an immediate family member
If you have questions on your own estate plan, reach out to our team. We'll get you pointed in the right direction.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. (C) Twenty Over Ten