Estate Planning: Debunking Some Myths and Considering Your Legacy
A well thought-out estate plan is important. A plan offers you the opportunity to make decisions and do things that will give you peace of mind. Similarly, it will spare your family and loved ones unnecessary stress, confusion and other unpleasant experiences and help avoid arguments between family members. Further, your plan sends a message about how much you cared for people, your favorite charity or both. A plan is part of the legacy you leave.
Unfortunately, people have some common misconceptions about estate planning. Debunking the myths gets us on the road to achieving all of these benefits. Some of the more common myths include:
Myth 1: Estate planning is only for wealthy people.
The truth is estate planning is for everyone. The term estate refers to the assets you own at your death, no matter how much they are worth. A plan for your estate, large or small, provides direction and certainty to the people and/or charities important to you and it affirms that you were thinking of them.
Myth 2: Estate planning is complicated.
The truth is estate planning should be as simple as possible to accomplish your goals. In most cases, a simple will and current beneficiary designations are the only documents you need to distribute your estate. However, it is important to begin the process with sound legal advice to simplify the process, help you make the best decisions and address all the critical details.
Myth 3: You need a will to prevent your estate from being taken by the government when you die.
If you die without having a will, which is called dying intestate, the truth is your estate will, by law, pass to your living relatives and, if there are none after tracing a long list, only then would it pass to the Commonwealth of Pennsylvania. However, there are significant reasons to have a will. Most importantly, you decide who will inherit your estate. The intestate law is rigid and does not consider the special needs of any person nor does it include people unrelated to you, no matter how important such a person is to you. Parents of minor children should also direct in their wills their choice of guardian for their children should they both die, otherwise they have lost the chance to choose. Finally, your will directs who will be your executor, the person responsible for carrying out the provisions of the will.
Myth 4: Your estate plan should focus on how to save the most taxes.
The truth is your plan should focus on accomplishing what you want. While the impact of both Pennsylvania Inheritance Taxes and Federal Estate Taxes should always be considered, it should not be the sole focus of your plan.
Myth 5: Estate planning is expensive.
The truth is estate planning is usually not expensive and reduces costs, conflict and stress for your heirs, while providing you peace of mind. Consider what that is worth to you. In many cases, creating an estate plan costs less than what you might pay for a few months of your combined cable TV and cell phone. While there are websites that offer estate planning documents and some that offer legal advice from lawyers you never see or meet, remember, buyer beware! Saving a little money by trying to do it yourself can prove very expensive financially and emotionally down the road.
Myth 6: Estate planning is only about distributing your assets.
The truth is estate planning involves personal feelings and decisions. Take time to consider what you want your family, loved ones and others to know and remember about you after you are gone, including your favorite books, quotes, music, sports teams, movies and favorite experiences. etc. Make sure you let your family or executor know where this treasury of memories can be found. This is how people will remember what made you unique. This is your legacy.