While most people understand that estate planning involves providing for loved ones upon their passing, many are unclear as to what the estate planning process actually entails. This unfortunately leads to stubborn myths about estate planning that this article seeks to clarify.
Myth 1: Estate Planning Is Only for Older People
Younger people tend to think that the estate planning process involves issues that don’t necessarily apply to them just yet. Questions such as “What will happen to my assets when I die? How will I provide for my loved ones when I am no longer around?” are typical questions that are commonly associated with those in their twilight years. However, an estate plan is useful even for young adults as estate planning is not just about death. Our estate plans include not only a Will and Trust, but also Power of Attorney documents (which is necessary for those traveling abroad, or in situations where you are unable to sign legal documents on your own behalf), Healthcare Directives, HIPAA authorizations, and guardianship designations for minor children.
Think of estate planning like auto or homeowners insurance. You may never need it, but in the off chance something should happen, you have the peace of mind knowing that you are prepared.
Myth 2: Estate Planning is Only for the Wealthy
Estate planning is about much more than just estate tax planning. While estate planning is certainly necessary for those with estates surpassing the current estate tax exemption of $5.45 million, the goal of estate planning is to ensure that your family is taken care of and to leave them peace of mind. A good estate plan will save your family from a lengthy probate process, and reassures you and your family that your wishes will be carried out. An estate plan also saves you and your heirs time and money. Estate planning is about providing peace of mind in knowing that your finances will be taken care of when you’re incapacitated, that healthcare decisions are carried out according to your wishes, and that your children are taken care of should the unexpected occur.
Myth 3: Estate Planning Takes Too Much Time and It’s Too Expensive
OC Wills and Trust Attorneys have developed an estate planning process that allows comprehensive plans to be completed within 2 to 4 business days from the initial consultation. We also do not need to know the specifics of your assets aside from the general value of your estate. Additionally, our firm offers video conferencing that allows those unable to meet in our offices to communicate with us from the convenience of their homes or offices. Estate planning is an investment for your future that will save your loved ones a substantial amount of time and money by avoiding the probate process. It also gives them the security in knowing that they will not need to guess at the distribution of your assets upon your passing. Without an estate plan, your loved ones will need to spend more time and money navigating California’s probate process. In fact, the probate process could cost up to 4% or more of the total estate value in administration costs. Not only is the price of an estate plan merely a fraction of the cost of probate, the peace of mind that an estate plan affords cannot be quantified.
Myth 4: Having a Will Avoids Probate
Unfortunately, merely having a Will does not avoid the probate process. While a Will is necessary in that it provides guidance to the court as to how you would like your assets to be distributed, the probate court still has to oversee the distribution process. Moreover, if you own real estate in more than one state, your property will go through probate in