Did you know that most adults in the U.S. do not have an estate plan? It’s true. These people likely know that they will need an estate plan eventually. They are not necessarily opposed to the idea, at least in many cases. But they don’t have one in place, so their property will be left to distribution per state law and their minor children will be left in the care of whomever the state deems appropriate should something happen to them before they complete estate planning documents.
The reason that most people don’t make an estate plan comes back to a myth that they have heard about the process. Below is an introduction to three of these myths. Understanding them can help you to avoid making mistakes that tend to stem from taking these myths seriously.
Myth: You don’t have enough assets to justify creating an estate plan
Even if you don’t have very many financial assets, you still do you do need to pass on what you own. You can also make a plan to take care of your debt, which often has to be paid by your estate. Additionally, an estate plan can be used for making future medical decisions and managing your digital footprint in the event of your incapacitation or death. Even someone who didn’t have any assets at all would likely still have numerous legal documents that they could use to benefit both them and their family, such as a power of attorney or an advance directive.
Myth: You can do it later
It’s very common to think of estate planning as something to do in old age, but the risk here is very clear. If you pass away unexpectedly, then what will your family do? They will have to make a lot of difficult decisions and sort everything out on their own. It’s better to make a plan far before you think you’ll need it so that it is there in case this happens. You can always update the plan along the way if it turns out that you really don’t need it for decades.
Myth: You are too young for estate planning efforts to matter
Unless you’re a minor, you simply can’t be too young to have an estate plan. Yes, you may have fewer assets in your 20s or 30s than you would in your 60s or 70s, but you can still use estate planning documentation to safeguard your interests in re: medical decisions. You also may have to think about what would happen to your children if you passed away, and you can make some of those decisions in an estate plan, such as choosing a guardian and setting up a trust.
Estate planning is beneficial for all adults. Be sure you know what steps to take to set up an enforceable plan that meets your needs. Seeking legal guidance is a good place to start.