Misconceptions about estate planning

| Mar 25, 2021 | Estate Planning |

There are a number of obstacles that may keep Californians from creating an estate plan. Some people do not want to think about the issues involved. Another obstacle is that there are a number of myths about estate planning. Myths can also lead to people creating an estate plan that is incomplete or invalid in some way, especially given California’s complex probate laws.

Myths about age and assets

An assumption that you can procrastinate on your estate plan because of your age can put your family in a difficult position. Similarly, you may assume that you do not need an estate plan because you are not wealthy. However, an accident or sudden illness can happen at any age, and having an estate plan can help protect family members. For example, you can use your will to name guardians for your minor children. Having an estate plan can make it less likely that your family will fall into conflict over your assets.

Your will

It is also important to prepare the estate plan correctly. For many people, a will is not sufficient for efficiently transferring some of your assets. Life insurance policies and retirement accounts are among the assets that pass by way of beneficiary designations, and these designations override any contrary provision in a will. There are also situations in which you might want a trust instead of a will. For example, if you have minor children, or if you want to protect assets for a child with special needs and ensure that the child can still receive government assistance, a special needs trust may be a better choice. Moreover, in California, a will is not enough to keep most pieces of real property out of probate upon your death.

Updating your plan

Some people may think that either they cannot change an estate plan once they have created it or that they do not need to look at it again. The reality is that regularly reviewing the estate plan is critical in maintaining it up-to-date.

Preparing an estate plan involves going over your financial records and thinking about your family and any possible conflicts that may arise. While it may seem like a daunting task, working with a good attorney may help you create the solutions that you need and make the process much more streamlined (and even enjoyable!).