Estate planning is an emotional issue. It deals with topics that may be difficult for you to discuss or even think about, such as death and incapacitation.
Because estate planning is hard to talk about, there are a lot of misconceptions about it. Basing your decisions on these misconceptions could cause you to make mistakes that negatively affect you or your family later on. Kiplinger describes some of the most common estate planning myths
1. You are too young for an estate plan
Many people mistakenly believe that estate planning is only for older people or those who have a lot of money. Because the future is unpredictable, it is never too early to start preparing for what could happen to you someday. Estate planning pertains to issues besides the distribution of your assets, such as advance directives for medical care if you become incapacitated and guardianship of your children if you die while they are still minors.
2. Trusts take care of everything
You should outline individual goals for your estate plan and choose documents that meet those goals most effectively. A trust is an effective estate planning tool, but it does not address every issue that could arise. For example, guardianship of minors and advance directives each require their own estate planning documents.
3. You have to divide everything equally among your children
In the first place, you do not need to leave your entire estate to your children if you think your wealth could do more good elsewhere. In the second place, you do not have to divide assets among them equally. For example, if you own a business, you do not need to bequeath your children equal shares. If you have one child who shows particular aptitude for the business and interest in running it after you are gone, it is reasonable to choose that child as your successor and bequeath the business solely to him or her.
You should tailor your estate plan to your individual needs rather than meeting arbitrary benchmarks based on misconceptions and myths.