Estate planning allows you to prepare for the division of your assets upon your passing, which is a huge part of the reason people avoid it. Thinking about death is definitely not something anyone wants to do, but it is necessary to ensure that your wishes are met upon your passing for your family, rather than having someone else make the decisions about it for you. However, many people also avoid it simply because they feel they do not need it based on these three myths:
- Only Older People Estate Plan: Estate planning is important, no matter what your age or even wealth may be, since many people also believe only the wealthy need to estate plan. No matter what your age, you need a power of attorney to make important decisions for you should you be unable. This even includes medical decisions if you are in critical condition and are unable to give your consent. During this planning, you can make your medical wishes clear, as well. This regards issues such as being on life support, taking medications, and donating organs.
- A Will Isn't Necessary with a Power of Attorney: You have your power of attorney, so nothing else is needed, right? This is not the case since your power of attorney can also suddenly pass, in which case someone else will be appointed. When this happens, you want to be sure that your wishes are still outlined clearly; otherwise, there will be certain choices that will be made without knowing whether or not it's something you would've approved of.
- Life Insurance Isn't Taxed, So No Worries: With a life insurance policy, many people automatically feel completely protected financially for their families. However, this is only partially true, since some of the life insurance actually will be taxable. For example, any income that is made after the date of death will be taxed. You need someone to be controlling this and taking care of it for you to ensure that money is properly divided based on what is definitely going to be received from the life insurance policy.
With these three common myths about estate planning set aside, you can begin to see why it's worth it to meet with an estate attorney to begin planning for your family's financial protection and your own protection of your wishes for your assets. There are many misunderstandings about the law that you should understand to ensure that your will is properly outlined and needs are met to a T.