Know the Truth: These Estate Planning Myths Could Cost You
As you likely know, estate planning is an important process that allows you to maintain control over how you will pass on your assets and property to your beneficiaries. However, there are many myths and misconceptions surrounding this process, leading to a number of common mistakes.
The following are some of the most common estate planning myths you should be aware of — and the truth behind them:
MYTH: You should do whatever you can to avoid probate
Probate does not necessarily mean high costs and long delays to settle an estate..Certainly, there are costs associated with probate, mostly attorney fees. But, drafting documents and implementing a plan to avoid probate also will costs you. You should become familiar with the likely probate related costs for your estate (which are payable sometime in the future) and compare them with the costs of probate avoidance that must be paid presently to get a true sense as to which system is best for you.
MYTH: The government will take your property if you die without a will
Actually, the court system will pass your property to your closet relatives according to intestate succession laws in your jurisdiction. Typically, this means spouses and children get first priority. You do not need to worry about the government seizing your property if you pass away, but you do need to worry about not having control over what happens to your assets.
MYTH: You need a trust to help you avoid estate taxes
The truth is that only a relatively small number of estates are subject to taxation. Only individual estates worth more than $5.45 million ($10.9 million for couples) are taxed by the federal government. Some, but not all states impose an estate tax. Thus, you may not need to concern yourself about avoiding estate taxes.
MYTH: Estate planning is only for protecting my assets
Although protecting your assets is a major aspect and benefit of estate planning, an effective plan includes involves so much more than just asset protection. It also includes guardianship instructions, charitable donation information and end-of-life care, among other issues. Speak with an estate planning attorney about what this process can do for you.
MYTH: Estate planning is only for wealthy people
Almost anyone can benefit from estate planning, which means you should at least consider it. Even if you do not have a valuable estate, you likely care about how you will be cared for at the end of your life or how your assets will be distributed to your loved ones after your passing.
For further guidance and advice on these issues and others, meet with an experienced Tampa estate planning lawyer at BaumannKangas Estate Law.