Estate planning can feel confusing, and well-meaning advice from friends or the internet often makes it worse. Here are four common myths and the truths that can save your family time, money, and frustration.
First, “If I have a will, my estate will avoid probate” is false. Property that passes by will must go through probate. The court oversees paying debts and distributing assets according to your will before beneficiaries receive anything.
Second, “Life insurance isn’t part of my taxable estate” is also incorrect. For estate tax purposes, the value of a policy you own is included in your estate, which means those proceeds can factor into potential estate taxes.
Third, “I’m too young to need an estate plan” can be a costly assumption. Everyone 18 and older should have basic documents and keep them current. Delaying planning can lead to disastrous results if illness or an accident strikes.
Finally, “A revocable trust will protect my assets from creditors” overstates what these trusts do. While a revocable living trust offers many benefits, it does not shield assets from your own creditors because you retain control and access to the trust property.
Don’t let myths derail your planning. An experienced estate planning attorney can help you sort fact from fiction and tailor a plan that truly meets your needs.
If you would like to learn more, or set up a complimentary estate planning consultation with one of our Madison, Wisconsin estate planning attorneys, please contact us and we can schedule a time to meet.