Common Estate Planning Myths
Developing an estate plan involves a process that people tend to postpone until their golden years, their kids enter college, retirement, or the birth of grandchildren. While these significant life-changes certainly merit reviewing and updating an estate plan, the important financial, health, and family planning goals at the heart of the process are too critical for procrastination. The notion that putting off decisions about these fundamental issues will not cause problems constitutes just one of many estate planning myths. We attempt to set the record straight about some of these common misconceptions below:
Estate Planning Myth #1: The only people that need an estate plan are those who are extremely wealthy.
While affluent individuals cannot afford to be without an estate plan, adults from all walks of life can benefit from some form of estate planning. Although the specific needs of people might differ depending on their assets, family relationships, financial circumstances, legacy succession objectives, and other relative considerations, individuals with modest estates can benefit from financial planning for retirement and college tuition for their children. New parents can have a will prepared to ensure that a court knows who they want to be their children’s guardian if something should happen to them. The point to understand is that the scope of estate planning issues involves much more than legacy succession.
Estate Planning Myth #2: Once you have had your estate plan prepared, you can lock the documents away until they are needed.
Although many people see estate planning as an objective to be accomplished, the documents and plan should be periodically reviewed and updated. In addition to having your estate planning lawyer revisit your situation every 3-5 years, major life events also merit a re-evaluation process. Life events that might justify an “estate planning checkup” include:
- Birth or adoption of a child
- New grandchildren
- Sudden changes in net worth
- Family estrangement
- Changes in charitable priorities
- Blending of a family
- Relocation to a new state
- Inheritance of significant assets
- Founding or development of a business
- Changes in the law (e.g. changes in the Internal Revenue Code)
Myth #3: Estate planning is a task for people in their golden years.
An individual’s estate planning needs and priorities will change throughout their life, but all adults can benefit from at least a simple estate plan. Young adults can construct an estate plan to manage their financial affairs or to ensure medical treatment conforms to their priorities in the event of physical or mental incapacitation. Even teenagers going off to college might want to give their parent a power of attorney to access bank accounts or correspond with medical insurance carriers and physicians. As individuals age and develop larger and more diverse assets, their estate planning needs and objectives will change, which will necessitate a more sophisticated plan.
Myth #4: If I have a living trust, I do not need a will.
While a living trust can avoid the costs and delay associated with probating a will, a comprehensive estate plan should include other documents. A living trust provides benefits, such as privacy regarding financial affairs and prevention of the delays and costs associated with the probate process. However, a pour-over will still be needed to cover assets that are never transferred into the trust. A living trust also does not address medical or financial decisions if you become incapacitated.
Myth #5: A spouse can be disinherited through a will in South Carolina.
When a spouse objects to the terms of a will, the husband or wife can choose to take a spousal elective share of one-third of the estate plan, which includes assets transferred to a trust. The surviving spouse can exercise this right by filing a petition for the elective share in the Probate Court and the executor of the will within 8 months of the death of the decedent or 6 months of the probate of the will, whichever date occurs later in time.
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Aaron De Bruin, Esq.
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Gary De Bruin, Esq.
Estate Planning Fees
The attorneys at the De Bruin Law Firm understand that Estate Matters can be difficult to understand and plan for. We are available to provide our clients advice and guidance during the Estate Planning Process. To view common fees associated with an Estate Plan please call us at 864-982-5930 or use the link below to view some of our common Estate Planning Fees.