According to a recent Caring.com survey, nearly six out of every 10 Americans do not have an estate plan. That percentage is even worse for millennials, as only 20% of 18-to-34-year-olds has set up a will or living trust.
Too many people consider themselves too young, old, or not rich enough to consider putting a plan in place. However, what they need to understand is that estate planning is part of life planning and essential for them and their family’s well-being, regardless of age or wealth.
Debunking popular estate planning myths
To understand the importance of having an estate plan in place, let’s address some common assumptions:
Estate planning is only for the rich: If you own any property and have dependents, an estate plan is vital for their future by:
- Protecting those who rely on you and your income
- Naming guardians for minor children
- Selecting loved ones and groups to receive your assets after your death
- Avoiding probate
- Minimizing tax obligations
- Naming an executor to manage your estate
Estate planning only distributes my assets: In addition to selecting heirs to receive your money and property, an estate plan also manages your assets while you are still alive if you become incapacitated by illness or injury. A living will outlines who you want to make decisions in your place and allows you to determine end-of-life medical care.
A will oversees all of my assets: This legal document explains how you want your property distributed after your death. However, there are likely other assets that exist outside your estate, such as life insurance policies and retirement accounts where you have assigned beneficiaries. Make sure these are up-to-date.
Once I have a will, I’m done with the process: Each of us goes many changes in our lives, and our wills should reflect those changes, such as the birth of a child, a marriage or a divorce. Estate plans should be revisited at least every few years and especially after significant life events happen.
Don’t forget to inform others about your plan
While an experienced estate planning attorney can help you find a plan that meets your needs, it’s crucial to communicate with your loved ones. That means letting those you trust know where the documents are located and how to obtain vital financial information, such as where accounts are located. It’s also essential to provide them with usernames and passwords for your digital assets.