Every year individuals and families of all ages, education levels, and tax brackets make critical estate planning mistakes. These errors stem from a variety of sources, but three big ones are:

• Ever-changing laws and regulations,
• The human tendency to discount future risks, and
• Decades of indiscriminately repeated anecdotes.

But as we near the halfway point of 2021, it’s more important than ever for individuals, families, business owners, and investors to face the hard truth that much of what they “know” about estate planning is wrong.

Some of these myths wreak havoc by steering you on the wrong course of action, others do so by justifying inaction. By interrogating some of these widely (but falsely) held beliefs, you can learn how to better protect yourself and your family and ensure that you don’t become a purveyor of these 3 dangerous estate planning myths.

Many middle-class families and individuals are uncertain whether or how an estate plan would benefit them. Much of the indecision stems from the false belief that the size and value of an estate is the primary qualification for estate planning.

But the size of your estate isn’t the only variable to consider in deciding whether to plan for the future. There is a myriad of issues that warrant or require estate planning strategies including:

• The overall complexity of the estate,
• The types of assets you own,
• The interests and future income of a spouse, minor children, or special needs children,
• The long-term care of pets,
• Your personal effects, family heirlooms, and similar items with sentimental value, and
• The person responsible for making health, financial, and end-of-life decisions on your behalf.

Moreover, many people vastly underestimate the total value of their estates. After we review their full asset portfolio, they are often surprised both by how large their estate actually is and how many assets they had originally overlooked.

At the end of the day, it’s not a question of the size of your estate; it’s a question of caring about your family’s wellbeing. Dying intestate creates a number of unnecessary hurdles that your grieving family will have to overcome in order to administer your estate. A small amount of planning on your part can relieve an enormous amount of stress on your family.

Estate planning is wrongly perceived as entirely death-focused. However, many, many aspects of a comprehensive estate plan will impact you during your lifetime. For example,

• Wealth preservation through income, gift, and estate tax planning,
• Protections for assets from creditors and lawsuits, and
• Business succession arrangements for family or small businesses.

Most importantly, however, is the basic fact that an unforeseen event can strike at any moment—that’s why they’re called un-foreseen. Being in your 40s, 50s, or 60s doesn’t exempt you from tragedy. A sudden illness, incapacity, or disability or an untimely death can leave your loved ones and valuable assets vulnerable.

In fact, the news is the riddled with stories of the untimely deaths of young people. You need look no further than the slew of celebrities, like Prince, who died young and whose estates are now embattled in bitter disputes.

Creating a comprehensive estate plans allows you to account for these various possibilities and forestall negative consequences. You can undertake valuable tax planning, protect your assets, designate someone to make healthcare or financial decisions on your behalf, and provide for the long-term care of loved ones.

It is true that intestacy statutes generally designate the legally married spouse as the decedent’s default beneficiary. However, intestacy laws differ from state to state, and they govern how, when, and to whom your assets and property will be distributed. So, even if you “told” your wife that you wanted her to get everything, you still risk your property and assets being distributed in ways you did not want.

Florida’s intestacy statute lists which members of your family receive what and in what order. Unfortunately, everything rests upon blood relations, so longtime friends or caretakers will not receive any of your estate.

Moreover, your spouse’s access to your assets and benefits may be significantly delayed by the probate process. The first thing that will happen after you pass away will be for the probate court to appoint a personal representative to oversee the administration of your estate since, without a will, you would not have designated one.

Eventually, after any creditors have been paid, the remaining property will be distributed. And, again, this distribution is also done according to the Probate Code or by operation of law, not your wishes. Some typical snags include:

• Improperly titled assets or property getting stuck in probate, meaning your spouse would not have immediate access.
• Assets or property transferring to a spouse or children from a previous marriage, meaning your current spouse would have to challenge the ownership in court.
• Other parties disputing ownership of assets and property, dragging the estate into lengthy and costly litigation.
• Business interests being unable to transfer swiftly to your spouse, thereby significantly hurting the value of the business.

Even if you would leave your entire estate to your spouse, there is no advantage to dying without a will. For example, you lose the opportunity to designate a personal representative, trustee, guardian for minor children, and to do valuable tax planning. Without taking such steps, you could force your family to undergo a protracted, expensive, and public probate process before receiving your assets.

Dying Intestate: Just Don’t Do It

These three dangerous estate planning myths have been the cause of untold woes for untold families. Despite the size of your estate, your relative age or health, or who you would leave your assets to, being explicit about your wishes is always the best option.

Working with an estate planning attorney to draft a comprehensive estate plan provides a range of benefits to you and your family such as probate avoidance, asset protection, tax mitigation, and dispute prevention.

Call us today at 561-998-2362 to schedule your complimentary Financial Legacy Review. Or take our Estate Planning Quiz to find out how much you could benefit from an estate plan.