January 2012

Estate planning is a very complicated area of law where believing in myths can hurt you and your loved ones. See if you’ve been operating under some common misconceptions:

Myth: I don’t own much, so I don’t need an estate plan.

Reality: A proper estate plan does much more than just give away your assets at death. For example, a proper plan should: name an agent to manage your finances and care for you if you become incapacitated; communicate your health care wishes when you can’t speak for yourself; and avoid probate at death, a costly, lengthy, and public court process. Most importantly, if you don’t say who you want to have your assets, the State of California will!

Myth: I already have a Will, so my family will not have to go through probate.

Reality: A Will alone does not avoid probate. A Will must be administered with oversight by a probate judge. A typical probate administration can last 6 months to 2 years.

Myth: I don’t need an estate plan because all of my assets are held jointly with another.

Reality: This can be one of the worst ways to hold your assets. A joint asset may be subject to higher capital gains taxes; is vulnerable to the creditors of all owners; does not ultimately avoid probate (it only delays it); and at death, a joint asset automatically transfers to the joint owner even if that’s not what you wanted.

Myth: I can do my own estate plan.

Reality: That may be true, but keep in mind that estate planning is more than just creating documents. Preparing a good plan requires understanding the big picture and ensuring that your documents work to achieve your goals under many different circumstances. As the saying goes, “you don’t know what you don’t know.”

Don’t rely on myths when it comes to your estate. Find out the facts, plan carefully, and execute a good plan to provide you and your loved ones with peace of mind and security.