Estate planning is important, but many people don't do it. Often, the reason is that they have heard some common myths and now they hold onto popular misconceptions about the process. It derails their planning and puts their family's financial future in jeopardy.
Whether you have done your estate planning yet or not -- but especially if you have not -- it is important for you to know what these myths look like. You do not want any of these misconceptions to cause you to make serious mistakes. These are often mistakes people do not even understand that they made until it is too late. To help you out, here are some of the common myths:
- You can never change your estate plan. Sometimes, people feel intimidated by estate planning because they think they can't make changes. What if they earn or spend a lot of money in the years to come, before they pass away? They put off making the estate plan until they're confident things won't change. The reality, of course, is that you can always change an estate plan. In fact, you should make your plan and then review it on a set schedule to make sure it still works.
- You can wait until you're older. This is one of the biggest issues with estate planning. People just think they have a lot more time. They want to wait until they're retired or until they turn 75 or until they go to the hospital and death seems closer at hand. The truth, though, is that life is unpredictable. You never know when you and your family will need that plan. You can do it at any age, even if you feel way too young to think about the end.
- All you need is a will. Most people talk about drafting a will as if it's the only piece of estate planning they have to do. They figure they just need to divide their assets in the will and call it a day. In reality, you want to think about things like trusts and more complex ways to pass on your assets. You also want to think about guardians if you have children. You may want to consider your tax situation and how to reduce what you'll pay. There are many things to consider outside of the will alone.
These are three of the main myths that you may run into, but they are far from the only ones. If you have not yet done your estate planning, consider how these things may impact it and take the time to look into all of the legal options that you have.