When you begin your estate planning, you will want to learn the basics and rules first. Don’t be fooled into making these assumptions, whether you’re attempting the DIY route or working with an experienced estate planning attorney.
- Wills Avoid Probate – False. It is actually the exact opposite. Wills are filed and they carry out your personalized wishes through the probate or court administered process. Wills do allow you to make personal choices instead of NC law and allow for things to be carried out efficiently as compared to passing away without a will, but both structures take the probate path.
- Estate Planning Is For When I’m Older – False. Once you reach 18 you are an adult and have the sole responsibility of making decisions for your own healthcare and finances. Regardless of the amount of assets you have, estate planning is necessary to plan for the unknowns of tomorrow. Who is looking out for you if you aren’t able is the key question, regardless of age.
- Revocable Trusts Protect from Creditors – False. A revocable trust can be a great estate planning instrument to carry out your wishes, provide privacy and potentially save on taxes and probate costs, but a revocable trust is not typically an asset protection tool. Irrevocable Trusts are a different story.
- What I State In My Will Trumps Other Documents – False. How assets are titled and beneficiaries designated take precedent over your wishes stated in a Will or Trust. It is important to make sure how things are titled or designated coordinate properly with your Will or Trust.
- My Estate Is Too Small to Worry About Taxes – False. Although estate taxes are less of a concern under today’s tax laws, income taxes (especially on retirement accounts) and other taxable assets are key factors in your estate plan and can result in significant savings if done right.
Check out our other blog post, Nine Estate Planning Mistakes, to make sure you’re not making these other assumptions.