Although the concept of estate planning is simple – it’s the process of planning for your future and the future of your loved ones. When you pass away, many individuals are unclear about what it comprises. Because of the ambiguity and mystery surrounding the process, several persistent misconceptions have developed. Here are five of the most common misconceptions.
My Estate Isn’t Large Enough To Necessitate Any Planning:
That’s partly due to our reasonable aversion to facing the truth that you won’t live forever. Still, there’s also a prevalent misconception that only the highly wealthy require estate plans or checklists.
Property And Possessions Are The Focus Of An Estate Plan:
It’s not only about the property in an estate plan. It also deals with pretty personal issues. If you have small children, an estate plan permits you to name the person who will look after them when you pass away.
Probate Is A Nightmare That You Should Avoid At All Costs In Estate Planning:
This fallacy is surprisingly tricky to debunk, yet probate deserves its terrible record. That image stems partly from history since probate was considerably more time-consuming and expensive, especially in jurisdictions where costs depended on the amount of the estate.
During The Estate Planning Process, I Can Disinherit Whomever I Want:
You’ve probably seen movies where the family patriarch threatens to disinherit the squandering son or immoral wife. In reality, things aren’t quite as they seem. In many countries, disinheriting a spouse is extremely difficult since the spouse can waive the Will and receive a share of the inheritance, which is usually much more than a trivial amount.
Taxes Will Destroy My Estate:
Even though estate taxes exist and that estate tax rates are very high, reaching 40% in some cases, federal estate taxes only apply to persons with estates worth millions of dollars. In many states, there are no estate taxes.
If you suspect your estate will be big enough to be liable to federal or state estate taxes, you should get legal advice from an estate planning firm like Staubus and Randall. They can assist you in determining the tax-advantaged planning methods you may employ to reduce the amount of taxes your estate will pay and maximize the amount you will be able to leave to your loved ones.