Estate planning is a process that allows the testator to instruct how their assets are handled after their passing. Many people find that passing their assets to family and friends is important. However, the process can get confusing with so much information online.
Some of the information online about estate planning isn’t factual and only makes the process difficult. It can help people who are looking to plan their estate to unlearn some common myths. Here’s what you should know:
Myth #1: You don’t need a will
Truth: Many people die without a valid will. However, that creates many issues for heirs and beneficiaries. Without a valid will, the testator has died intestate, which means the state is responsible for administering the estate. Since the state doesn’t know what a testator intends to do with their estate, assets may not be distributed according to the testator’s wishes.
Myth #2: A will and a trust are the same thing
Truth: A will is a legal document that includes an itemization of assets, heirs and beneficiaries. Additionally, an executor who is named in the will may be responsible for the estate’s distribution. A trust allows the grantor to place assets with a trustee who is responsible for distributing them accordingly. These two legal documents sound similar, but a trust can avoid probate, estate taxes and probate disputes. It also offers superior asset protection.
Myth #3: Estate plans expire
Truth: Estate plans don’t expire but they may need to be revised. Many people update their estate plans every three to five years to include new assets. An estate plan may also need to be altered if there are major life events, such as marriage or childbirth.
If there’s any confusion during the estate planning process, then learning about their legal options can help testators.