Let’s talk about more estate planning myths. There are a lot of silly things out there that you hear. I’d like to dispel some of those.
Another one is “estate planning is only for distributing assets after I’m gone.” Classically that’s how we think about it — that it’s what’s going to happen to our assets, our investments, real estate once we pass away. But this forgets one of the main purposes of trust right: maybe you’re a couple and one of you passes away; that trust is still available to manage and be administered during the life of the second of you. Also, it could be there for both of you during your life just just for any regular needs. This is not to mention a great benefit of a trust: if you should become incapacitated or somehow need the help of another, well, if you have set up a power of attorney, you’ve got someone who can take care of things for you, to take care of day to day business and health care for you, on your behalf. If you set up a trust, you have someone who has access to assets to support those things that you need.
Another estate planning myth: “I’m too young; I don’t need to take care of this yet.” The simple answer to this is that you DO need to take care of this some time. And let’s say you are very young, maybe you have children. Your estate plan is where you’re going to nominate those folks who would step in for you for being guardian and conservator for your children if something happens. It’s nothing we like to talk about but the estate plan is where you make this designation.
Another classic myth: “My Will’s going to take care of everything.” Fifteen to twenty years you signed a Will and you’re hopeful you are covered. That could be, but you should remember that things passing by title or by beneficiary designation are going to pass outside the reach of your Will. So your Will is not even going to have an effect on those assets at all. You may not be aware of that; likely are if your attorney apprised you well. Also insofar as “it will take care of everything,” what about the need for a Durable Power of Attorney? If you need help during your life (due to incapacity) you’ve got to have that power of attorney in place before that need arises. Your Will’s going to take care of everything? What if something happens to you and you don’t want to be maintained by life-sustaining machines? You can sign a living will — the appropriate document to express your wishes, if you have made a decision about that.
Finally, you may remember a commercial that I “just set it and forget it?” Ideally this is right. You do it once, and it’s taken care of. But the great thing about any of these and particularly with a trust, what if your family situation, your portfolio changes, you learn about a special needs member of your family, a grandchild, your ideas change about where or to whom your assets should be distributed. Or, maybe you have a different idea about who might make the better trustee in your later years. Or maybe your successor trustee moves a couple of states away and that just isn’t practical anymore. It’s not a bad idea to go back to take a look at your estate plan as you have time. So those were another four myths today about estate planning. What are you telling yourself to put off estate planning? I hope this helps you.
I’m Dan Covington, and you can always find me at Estate Plan Kansas.