In recent weeks, Aretha Franklin passed away without an estate plan in place. She is not alone. According to a 2017 survey from Caring.com, over 60% of Americans do not have a living will or trust established. No matter if you live in Los Angeles or anywhere else in the US, estate planning is one of the most important areas of financial planning. Building and maintaining your estate plan is the only way to ensure your wishes are met and loved ones are taken care of. An estate plan is also essential for maximizing your health care quality and protecting your wealth if you become incapacitated. Here are some common fallacies when it comes to estate planning.
Estate Planning Myths
Myth #1: Estate planning is only for the wealthy.
No matter the size of your assets, you have the final say in how your assets are distributed at your passing. If you don’t make your estate plan known, the state will take your estate through the probate process. The probate process may be expensive, take years to settle and distribute your assets in a manner that you may not prefer.
Myth #2: I’m in good health and/or too young and don’t need an estate plan yet.
If something happens unexpectedly, wouldn’t you prefer to make sure your loved one’s are taken care of? An estate plan is never set in stone, you can always update it as your needs change over time.
Myth #3: I don’t need an estate plan.
Unless you give your family clear directions, how do they know your preferences for how you’d like your assets distributed? Would you rather have probate court determine how to distribute your assets? Taking no action in building and maintaining your estate plan leaves a long-lasting and unnecessary effect for your loved ones forced to pick up the pieces.
Myth #4: I’ve already wrote my will and/or set up my trust. I don’t need to review or make updates to my estate plan.
Your family, assets and wishes will change over time along with the laws of your state and the nation. It’s important to review your estate plan on a regular basis or as life events occur.
Next Steps: Estate Planning Documents and Reviewing Your Estate Plan
I recommend to learn more regarding estate planning documents and how to review your estate plan. These documents are essential to identifying and carrying out your wishes and should be reviewed on a regular basis.
Forbes: Avoiding 7 Deadly Estate Planning Mistakes
Fee-Only Financial Planner Los Angeles
Still have questions in determining how you should develop your estate plan? Meet with a fee-only financial planner to focus on your estate planning in Los Angeles or online.