Creating an estate plan is ideal for two reasons: it gives you control over how your assets are handled after your death, and it provides your beneficiaries some financial comfort.
Nonetheless, some people are hesitant to make an estate plan due to the misconceptions surrounding it. Read about some of the common myths and facts about estate planning to gain a better understanding of what it entails.
Myth 1: Estate plans are only for rich seniors with children
Fact: While it’s true that most estate planners are wealthy, some have a modest income. In fact, about 50 percent of Americans with estate plans make between $40,000 and $99,999 a year.
And you don’t have to be married or have children to be an estate planner. You could draft a will or trust for a pet, your favorite charity or a beloved relative.
Myth 2: Due to taxes, my estate would leave my heirs with financial burdens.
Fact: Not every state taxes inheritances or estates. Only 17 U.S. states impose a tax on property or money. (Maryland is the only state that taxes both estates and inheritances.) Even then, there are tax mitigation strategies you can use to avoid problems with your estate.
Myth 3: An oral will is just as good as a written will.
Fact: Even if you find it easier to create an oral will, most states (including California) don’t allow them. It’s difficult to prove an oral will since there’s no tangible evidence of your wishes. You need to put your wishes in writing if you want them to be carried out.
Now that some misunderstandings of estate planning have been cleared up, you may have more questions about them. It helps to reach out to legal assistance to learn more.
