10 Estate Planning Myths

There are many estate planning myths that can keep you from going through with creating, executing, and funding your estate plan. You need to know the truth about these estate planning tips to keep from getting caught up in the untruths and misconceptions that abound in popular culture.

Estate Planning Myth #1: Estate Planning is Only for the Rich

Popular culture often depicts the reading of a will or the execution of a deceased person’s estate as a grand affair reserved only for the wealthy. While those with large estates do have more to think about in their estate planning, you don’t need to be rich to benefit from planning for your affairs after your death. Creating an estate plan can keep your family from needing to scramble to care for you in your final illness, and can lay out a plan for your estate – big or small.

Estate Planning Myth #2: I Can Get to My Estate Planning Later

While this is less of an estate planning myths, it is a pitfall that many people fall into. They know estate planning is important, but assume that it is something they can put off until later. Unfortunately, the truth is that no one knows when their estate plan could come into play. Even young, healthy adults could suffer an illness, injury, or accident that leaves them needing someone else to handle their care, or their final affairs. Don’t put off planning for your estate until it is too late. Creating an estate plan can prepare you for unexpected emergencies.

Estate Planning Myth #3: My Spouse Will Get Everything So There’s No Need for an Estate Plan

If you are married and many of your assets are jointly owned, you may not see the value of creating a will. It is true that a surviving spouse is entitled to a substantial portion of the deceased’s estate. However, there are a variety of strategies – from Transfer on Death accounts to Revocable Living Trusts – that can put your assets in your spouse’s hands faster, without needing to go through the Connecticut probate process. Working with an estate planning attorney now to properly title your assets, designate your beneficiaries, and plan for the transfer of assets can relieve stress for your spouse while they are grieving your loss.

Estate Planning Myth #4: I’m Too Young for Estate Planning

Many young adults and new parents put off starting their estate planning because they think they are too young to benefit from it. However, even college students can benefit from getting an estate plan in place. You can designate your parents as healthcare surrogates or name an intended guardian for your children. Your estate planning should start as soon as you hold assets in your own name, or have dependents who rely on you, if not sooner.

Estate Planning Myth #5: Estate Planning is Only Valuable After You Die

The most visible parts of estate planning involve the distribution of your assets after you die. But estate planning also involves your care while you are still living. A thorough estate plan may include:

• A durable financial power of attorney to allow a loved one to access your accounts and pay your bills
• A healthcare surrogate designation to authorize doctors to speak to your chosen healthcare advocate and let that person make decisions on your behalf
• A revocable living trust that names an successor trustee to manage your financial affairs during your lifetime, even when you are not able to handle them yourself

These documents can protect and provide for you in the event of an accident, illness, or injury, and possibly keep your family from needing to seek a guardianship from the Connecticut probate court to manage your care.

Estate Planning Myth #6: If I Die Without a Will My Assets Will Go to the State

One pervasive estate planning myth is that if you die without a will, all your assets are surrendered to the state. In fact, the State of Connecticut, and most other states, have “intestacy laws” that cause your assets to be passed to your closest living biological relatives – most often your spouse and children – after your death. It is only if you die without any biological heirs that your assets will “escheat” to the state. However, the time and effort required to identify and notify your heirs can delay the administration of your estate, and keep your loved ones from having access to your assets for months or even years after your death.

Estate Planning Myth #7: You Can Avoid Probate By Writing a Will

This myth is related to the last one. It is true that you can avoid the intestacy process by writing a will, trust, or other estate plan. However, if you only execute a will, your family will still need to register that will in the Connecticut Probate Court and undergo the estate administration process under the supervision of a probate judge. But there are ways to significantly reduce the role the probate court plays in your estate administration. If your goal is to avoid probate, you should speak to an experienced estate planning attorney to find ways to remove assets from your probate estate.

Estate Planning Myth #8: I am Not Rich Enough to Worry About Estate Taxes

It is true that most estates are too small to trigger federal estate taxes as the laws are now. However, under current federal law, the taxable value of an estate is scheduled to drop in 2025 to just $5 million. If you have a home, boat, retirement assets, furniture, heirlooms, or other valuable property, you could easily see your estate’s value grow beyond that newly reduced limit.

In addition, the Connecticut estate tax is a flat rate of 12%, regardless of the size of the estate. However, there are certain deductions that your estate can claim, depending on how you structure your estate plan, and to whom you give your property. That is why you should consider estate planning strategies to reduce your beneficiaries’ tax liability even if you think you are not currently rich enough to worry about estate taxes.

Estate Planning Myth #9: Preparing an Estate Plan is a One Time Event

Whether they realize it or not, many Connecticut residents fall for the estate planning myth that once their estate plan is done they never have to think about it again. However, your estate and your financial circumstances change over time. Even who is in your family can be affected by births, deaths, and divorces. It is important to periodically review your estate plan to keep everything up to date. If changes need to be made, your estate planning attorney can help you prepare a codicil to amend your will, or even draft a whole new estate plan to account for those changes.

Estate Planning Myth #10: You Don’t Need an Estate Planning Attorney

It is true that you can get the basic forms for key estate planning documents like powers of attorney and simple will templates online. But this doesn’t mean you don’t need to talk to an estate planning attorney when preparing your estate plan. The online forms often don’t provide you with important information about what you should include in the will, or the effects of your decisions. You could accidentally omit intended beneficiaries, cause more of your money to go to the probate court, the State of Connecticut, or the IRS, or even cause a disabled beneficiary to lose access to state welfare benefits. Connecticut law also has strict requirements for how estate planning documents are completed and executed. Failure to meet these requirements may result in a will that looks good but is totally invalid! Working with an experienced estate planning attorney will ensure you get everything right and avoid any unwanted surprises for your family after your death.

The estate planning attorneys at Lawrence & Jurkiewicz, LLC represent clients in Hartford and Litchfield Counties. Please call us at (860) 264-1551 or contact us at your convenience to discuss your estate plan and prepare your last will and testament.