Many people see estate planning as a one and done task wherein you get a will or a trust and are done with it. But this approach is a bit narrow minded. Estate planning can do so much more: It protects you both during life and at death. And, if done right, can protect your well earned legacy. If done poorly, then the plan won't be worth the paper on which it's written.
Myths and Misconceptions:
Myth #1: If you do nothing, it will all go to your spouse or children.
This may or may not be true. Yes, the intestacy statutes will first distribute to your spouse, and then your children. But what if your spouse remarries? What if you or your spouse is on a second marriage? What if you or your spouse have children from before your marriage? What if your spouse gets into credit trouble or is scammed? What if your spouse has children after you have passed? What if your spouse disinherits your children? There are a lot of unknowns that can happen that, if not prepared for correctly, can be devastating to your estate.
Myth #2: Estate planning is all about avoiding taxes.
This couldn't be farther from the truth. In fact, most estates will not be subject to an estate tax.
Estate planning goes far beyond tax planning. It prepares for your life when you are incapacitated, it prepares for Medicaid expenses, it can secure assets for your children, among many other things.
Myth #3: Probate in Minnesota isn't so bad, I'm not concerned with it.
It is true that probate is a much easier process in Minnesota than in states like California, Florida, or New York. But it is still a long and expensive process. Even a quick probate can take 6 months and cost many thousands of dollars in attorney fees and other costs. And, during probate, your accounts and property will be frozen and inaccessible by your loved ones. If probate is a concern, you need to do some careful planning.
Myth #4: I can just download something from the internet and do it myself.
This is really dangerous territory. Many of the forms on the internet are flawed, incomplete, or even incorrect on the law. Even templates from legitimate sites are often flawed. And if you go at it alone, you don't know what you should be looking out for. If you accidentally write an ambiguity into your will, you could invalidate the entire document. Remember, most of your estate plan will be effective after you have died. This means you won't have a chance to change or fix anything. You need to have experienced counsel guide you through the many pitfalls of estate planning.
Myth #5: I know what I want, I'll just hand write my own will.
This is called making a “holographic will”. They are completely invalid in Minnesota. In fact, unless a will is carefully executed in accordance with the statute, a will has no legal effect. Make sure you are guided by experienced counsel when you do your estate plan.
Comprehensive: Beyond “Just a Will”
Estate planning is more than just drafting a will or trust. A simple estate plan may include a will, health care directive (including a health care proxy and a living will), several durable powers of attorney, and a guardianship directive. The will may include various testamentary trusts. You may choose to have a revocable living trust. Your house may be re-deeded into a transfer on death deed. You may include in your plan Medicaid planning or trusts for special needs planning. The possibilities are many. At the same time, the risk of running into a pitfall that could void your entire plan are always around the next bend.
Comprehensive estate planning takes into account your situation and your unique circumstances. It professionally tailors a plan to meet your needs and desires. This is your legacy; make sure you have someone knowledgeable to guide you through the process. If you are ready to talk about what a comprehensive estate plan means to you, contact Signature Law today for a free consultation.