Estate planning is a process by which individuals protect and preserve assets for themselves and for their heirs and beneficiaries and then transfer those assets, during life or upon death, consistent with predetermined goals. There are a lot of misconceptions when it comes to estate planning. Understanding what an estate plan can do for you and understanding the consequences of not having an estate plan are important considerations. CCHA attorney Victoria Howard shares common misconceptions about estate planning.

Myth: I don’t have a large enough estate to need an estate plan

It is often true that individuals think their estate is too small to necessitate an estate plan. However, an estate plan can accomplish more than just distributing your property upon your passing. For instance, if you have minor children, an estate plan can nominate a guardian and help to create a plan for who will take care of your children upon your passing, regardless of the size of your estate.

Additionally, even if your estate is small, you still have an interest in directing where you want that property to go upon your passing. If a person dies without a will, Indiana’s intestacy statute will determine how that person’s property will be distributed. For example, if a person who is married with two children dies without a will, the intestacy statute dictates that ½ of that person’s property goes to their spouse and the other ½ will be split equally amongst their children. Often, the intestacy statute creates unintended and undesired transfers that creating a will can help to avoid.

Myth: I’m too young to think about estate planning

While estate planning is not always the most comfortable topic to consider, as it is generally thought of in relation to one’s death, it is important nonetheless. Often times, younger individuals may put off estate planning as planning for death is not an important or comfortable consideration. Unfortunately, accidents can happen any time and it is important to have a plan in place before that happens to avoid unintended consequences.

Myth: I only need to plan for after my death

While a will helps individuals plan for the disposition of their property after their death, a good estate plan also includes planning for problems that could arise during life. For example, a power of attorney, health care power of attorney, and living will, each allow you to address decision making preferences during your lifetime. A power of attorney allows you to appoint someone to handle your financial decisions in the event you need help. A health care power of attorney appoints someone to make medical decisions if you become unable. A living will lets your wishes with regards to life-prolonging procedures be known.

It is important to address these decisions while healthy and competent to save your friends and family hardship if an unexpected accident or illness should prevent you from making decisions for yourself in the future.

Myth: My will takes care of all of my assets

While a will may control the distribution of many of your assets, it is important to give careful consideration to what each of your assets are and how they will be impacted by your will. Certain assets may transfer outside of your will. For example, joint accounts, life insurance policies, and retirement accounts, often transfer outside of probate. When an asset has a joint owner or beneficiary designation, those assets may transfer directly to that beneficiary or joint owner, outside of the plan you may have created in your will. It is important to consider all assets and by what means they will be transferred upon your passing.

Myth: I can create an estate plan on my own

With today’s technology, it is often tempting to create an estate plan on your own. There are many online services that provide templates and drafting services. However, these tools may not always be accurate and compliant with Indiana law. Additionally, these online services are not able to fully evaluate your situation and the planning tools that are right for you. While these tools might appear to be a cost saver, if they are not the proper planning tool needed or if they are not properly compliant with appropriate law, they will likely not be cost effective at all.

Myth: Once I have an estate plan, I don’t need to revisit it

It is very important to revisit your estate plan on a regular basis.

Circumstances change and so do planning goals. Major life changes such as death of a family member or divorce need to be addressed within your estate plan. Simple changes, such as your children transitioning from child to adult, are also important considerations for planning. Moving or relocating to another state may also trigger a need to revisit your estate plan.

The desire to understand and control your personal and family financial situation is typically the primary objective in developing a reasoned and comprehensive estate plan. No matter your specific needs, our attorneys will help you develop an estate plan that is tailored to meet your unique goals, expectations, and family circumstances. Contact our Estate Planning Group at CCHA to discuss your comprehensive estate planning needs.