Estate planning is a process that allows people to instruct how their estate is handled in anticipation of their passing. Estate planning has a lot of moving parts, which can be confusing when the testator has been misinformed about the process.
Common estate planning myths can lead to serious issues. It may help you to learn the truth about a few estate planning myths:
Myth 1: Heirs and beneficiaries are the same thing
Truth: While heirs and beneficiaries both gain from an estate, they are not the same thing. An heir is the next of kin who would gain from an estate if there was no valid will. A beneficiary is a family member, friend, colleague or charity who has a legal right to assets because of estate planning documents.
Myth 2: You can make a valid will without anyone knowing
Truth: While many people create wills that other people don’t know, at least two other people should know about the will to make it valid. A valid will must have two signatures from witnesses who are not set to gain from an estate.
Myth 3: You should save every copy of your will
Truth: Many people update their estate plans. Saving every old will can lead to legal issues for executors and beneficiaries. Old wills should be revoked. The best way to revoke an old will is by physically destroying it.
Myth 4: Beneficiaries can’t avoid probate
Truth: Probate is a process that allows the executor to complete their duties, which can mean beneficiaries will have to wait a year before they get any assets. However, people can make a trust in their estate plan to help beneficiaries circumvent probate.
Myth 5: You should only make an estate plan if you’re rich
Truth: An estate plan is primarily about instructing how assets are distributed. However, an estate plan isn’t just asset-focused. A testator can make an estate plan to designate a guardian for their children or name a power of attorney.
If you’re planning your estate, it can help to reach out for legal assistance if you have any questions.