• 26
  • May
    2011

In the last post, we were discussing misperceptions that many people have about estate planning. Unfortunately, belief in these myths about inheritance leads many people to put off making an estate plan, or leads them to forego establishing a plan when they really need one. Here are some more common misperceptions about estate plans:

3. Once I have a will or a living trust, all eventualities are covered.

There are two problems with this. First, Florida living trust attorneys find that all too frequently, people establish a living trust, then forget to officially transfer ownership of the assets over to the trust. Without this step, the living trust has no effect.

Second, even if your documents and follow-up are all in order, circumstances always change. It is important to revisit your estate plan on a regular basis. What you originally set up may not cover future eventualities, so changes must be made to adjust to new circumstances.

4. I'm not wealthy, so I don't need an estate plan.

"Wealthy" is not the standard by which to judge the need for an estate plan. If you have no will or trust, any assets that you do have will be distributed according to a formula set up by law. Relatives you hardly know could inherit your estate, to the exclusion of close friends or charities that you really care about.

Aside from inheriting your money, estate plans cover financial and health care plans if you become incapacitated. Those instructions will be needed even if you are not "wealthy."

5. I might be held responsible for my parents' debts.

The estate is responsible for the debts, and if there is not enough money in the estate, the debt will probably go unpaid. Children are usually not responsible for parents' debts, and even spouses' obligations on debts can be very limited. 

Source: KARE "Do you have a will? Estate planning basics" 5/25/2011