When I sit down with a new client who is looking to create or update a Will, I am prepared to hear at least one common misconception about estate planning. As with many things, TV and movies have not prepared us to understand how things work when we or a loved one passes away. We are here to guide you through the myths and misconceptions of estate planning, and make sure you and your loved ones are protected adequately.
1. I already have a Will, so my estate won’t go through probate.
I’m starting with this one because it is – by far – the one I hear the most! It is also the most concerning, because it is completely false. In fact, almost the opposite is true: a Will is only used if there is a probate proceeding!
A Will is designed to instruct the Court on who you would like to be in charge of your assets upon death (the “Personal Representative”) and how you would like your property to be distributed. The Will is filed publicly with the Court and used as the guideline for how your estate should be managed. A Will is a beneficial document to have for many reasons, but having a Will alone does not keep your estate out of probate.
2. I’m single without kids, I don’t need an estate plan.
I understand why someone would think this – who needs to worry about an estate plan when there is no spouse or kids to “take care of” upon passing? In reality, the opposite is generally true. In our experience, those who are unmarried and/or do not have kids typically have the greatest need for estate planning. Without an estate plan, the law will supply the rules to determine (1) who has authority to consent to or refuse medical care on your behalf; (2) who has authority to apply to be your guardian or manage your finances; and (3) who receives your assets upon death.
So, even if you have a long-term partner or someone who is a child-figure in your life, the law will not recognize them as having authority to act on your behalf during incapacity or receive your assets upon death. An estate plan effectively states your wishes for who you would want to take care of you during incapacity and ensure the people you love receive your assets upon death.
3. I am not rich enough for an estate plan. I am definitely not rich enough to need a Trust!
We hear this one a lot – especially when we talk about setting up revocable living trusts for clients. Many of our clients associate trusts with multimillionaires who want to establish trust funds for future generations. While some of our clients are in that group, the majority are not.
The truth is, everyone, at all levels of wealth, can benefit from estate planning. Estate planning is not just about tax savings, it also ensures you are taken care of during incapacity. This is something we all need, not just those in the top income level.
Additionally, if you own any real estate at all (regardless of the mortgage balance), a probate will be needed to settle your estate absent proper estate planning. Probate is much more costly than creating an estate plan – usually at least three times more expensive! We have seen many clients who die without much money, only to see the money dissipated by the high costs of probate and after-death expenses. It is a sad scenario which can be avoided by proper planning.
4. I don’t need a lawyer to draft these documents.
This one, frankly, is actually kind of true. Many of these types of documents can be found online. You simply put in your information, and a Will is generated! While these documents might be technically legal (that is, if they are witnessed, signed, and notarized as required), that does not mean they will meet your estate planning goals (remember Myth #1).
Our goal is to be translators of your needs and wishes: we explain how the process works, you tell us what you want, and we translate that into the language that the law recognizes. On several occasions, clients have come into the office with a copy of a Will they printed online and signed at home in front of a few friends. Often, the Will is legally valid, but the clients admit they do not know what it means or how it will be used. They do not know whether this takes the place of a power of attorney, or how this interacts with the beneficiaries listed on their retirement accounts. I cannot remember a single time where a client who previously had a “homemade” Will expressed regret about getting professional guidance. These matters are just too precious to be made without proper knowledge of the legal processes at play.
5. I’m too young to need an estate plan.
Estate planning is not on the mind of many young people – and for good reason. Hopefully, young people do not need to consider what happens to their property upon death for a long, long time. However, estate planning is not just limited to planning for death. Accidents can happen at any time, and having a power of attorney and healthcare directive in place will ensure that our loved ones are protected. Many parents assume that they would still be able to make healthcare decisions for their young-adult children, for example. This is not the case. For this reason, we often recommend healthcare directives for college-aged kids and unmarried young adults.
Parents with young kids also can greatly benefit from estate planning. It gives great peace of mind to parents to give guidance on who should care for their children if something were to happen to them. Estate planning also ensures money is held for the kids’ benefit in the way the parents instructed. We hope these instructions are never needed, but parents can rest assured that they have made their wishes known in the worst-case scenario.
Our estate planning attorneys are licensed in both Minnesota and Wisconsin. We would be happy to assist you in answering your estate planning questions and creating a plan that is tailored to your family’s needs.
Written by Laurann J. Kirschner
The material contained herein is for informational purposes only. It does not create an attorney-client relationship between Galowitz • Olson PLLC and the reader. By viewing our blog, the reader understands that the information herein is not offered as legal advice and should not be used as a substitute for legal advice. Readers are encouraged to consult with an attorney for questions related to a specific situation or concern.
