A big reason why many people make mistakes in their estate plans is due to societal misconceptions. Numerous myths persist. One huge myth that causes problems is the belief that people should wait until later in life to create an estate plan.
The truth of the matter is that every adult needs an estate plan. You need a plan to protect your assets and your family – and the sooner you create one, the better.
Here are other myths to be aware of:
Estate planning is only for the extremely wealthy
Even if you do not think you have a lot of money or assets, you may be surprised at how much you do own. From money in the bank to homes and vehicles, there may be many assets, and you will need to determine how to distribute them. You also need to consider investments, retirement accounts and family heirlooms. All of this can add up quickly, and you will soon learn the necessity of establishing an estate plan.
You cannot modify an estate plan
Many people incorrectly assume they cannot alter an estate plan once it is set up. Most attorneys actually recommend reviewing your estate plan once every three years or so to see if you want the distribution of assets to remain the same. If you have more children, want to change a beneficiary or make other changes, you can do that at any time you wish.
A will is everything you need
While wills are important, they are only one component of an effective estate plan. Wills help with the distribution of some assets, naming guardians for minor children and making your final wishes known. More complex assets may require a trust. And you should have powers of attorney for financial matters and healthcare in case you are incapacitated and cannot make decisions. These documents will protect you, your assets and your family.