Here are several common myths about estate planning. Let's review these and how to protect yourself and your family.
1. Estate planning is only for rich people. This the most prevalent myth about estate planning and probably the most dangerous. It is not true in any way. While wealthy people need estate planning like everyone else, they benefit from an a subset of estate planning that focuses solely on death taxes.
Protecting yourself and your family in the event of an unplanned illness; disability or death does not depend on how much money you have. The focus and estate planning tools to solve these issues are asset independent.
2. The Congress will solve the death tax problem. This is the current popular myth and also dangerous. It is now July and Congress has done nothing to solve the estate tax crises they created by not acting before the end of 2009 to extend the $3.5 million estate tax exemption. Not only does Congress show no interest in fixing the 2010 and 2011 disaster, they have announced that they have no plans to do so.
Relying on the government to solve your problems may be popular now, but it is very dangerous to you, your family and your property. Since there exist simple tools and strategies to solve this latest Congressional problem in estate planning, a good question is, why would you even believe that the government can fix this for you?
3. I don't have any assets so I don't need an estate plan. This myth is actually a case by case issue. It could be true only if all of the following are true for you:
A. You have no assets, no insurance, no retirement, no IRA or 401(k) and are permanently unemployed.
B. You have no family.
C. You don't care what happens to yourself if you are sick or incapacitated.
If you don't meet all of the above criteria, then an estate plan in some form is appropriate for you.
4. Estate planning is expensive. This myth is also untrue. Most people spend more money and time each year on their annual vacation then they spend in their lifetime on their estate plan. Many estate planning solutions are either free (a Living Will) or cost almost nothing when compared to the problems and crises that they solve.
I hope this article clears up these common estate planning myths for you. If you you have questions, please contact me. Our mission is to make the world better one estate plan at a time. Why not start your estate planning today? Now, that's a good question!
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