Estate Planning is a very complicated area of the law where myths abound and they can be harmful to you and your loved ones. Below is a list of common myths about estate planning that our Chicago estate planning attorneys often confront.
Estate Planning Myth #1: If I have a good Will, probate will not be required, and my assets can be transferred immediately to the beneficiaries of the Will.
In fact, having a Will mandates a probate in most circumstances and the assets may not be transferred to the heirs for months or years. Probate is a court proceeding to transfer title from the decedent’s name to the living beneficiaries. Probate occurs in the state of your legal residence as well as any state where you own real property. The length of time to complete a Probate varies from state to state, but can take six to eighteen months, on average. Probate is frustrating to the heirs and is public record.
Estate Planning Myth #2: I don’t need a will if I have a small estate.
Many people also believe that if there is no Will, all the decedent’s assets will be distributed to the surviving spouse. If you don’t create a valid Will, the state of Washington has a statute that will dictate where your assets go and who will administer your estate. State law may not distribute your assets to the people you want to have them.
Estate Planning Myth #3: If my assets do not exceed $600,000.00, I will avoid probate.
In Washington, if you have over $60,000.00 or real estate, your estate will probably require probate, unless you use a Living Trust or some other probate-avoidance technique.
Estate Planning Myth #4: A Will covers all my assets.
Wills do not cover assets held as joint tenants with right of survivorship, retirement plans, annuities, life insurance, financial account with payable on death or transfer on death designations.
Estate Planning Myth #5: I can do my own estate plan.
Estate planning is more than just creating documents. It is understanding the big picture and how the legal documents will work in concert with the assets at the time they are needed.
Estate Planning Myth #6: Only the wealthy need to worry about estate taxes.
In fact, in Washington, any estate exceeding $700,000.00 is subject to estate taxes.
Estate Planning Myth #7: I don’t need an estate plan because I hold all my assets jointly with another.
In fact,this is one of the worst ways to plan you estate. The asset may be exposed to estate and gift taxes; it does not avoid probate, just delays it until the last owner’s death; it may cause estate, gift and capital gains taxes; it is subject to the creditors of all owners; and it will result in the transfer of the property to the joint owner when one owner dies, even if that was not intended taxes.
You can’t afford to rely on myths when it comes to your estate. Contact our Chicago estate planning attorneys to find out more about the facts and to develop a plan that provides you with peace of mind and security for your loved ones.