Top Myths of Estate Planning
There is a lot of misinformation that surrounds wills, trusts, powers of attorney, and advance directives, but these are the most common.
- I have a will. I don’t have to go through probate.
Unfortunately, this is a common misconception. A will does not avoid probate, but it makes the probate process easier. Probate is the process of authenticating a will. If you do not have a will, the probate process can be lengthier and can be cumbersome on your loved ones. Having a will makes the process easier and less stressful on your loved ones.
- I told my family my wishes, so I don’t need a will.
In Georgia, to have a valid will, it must be in writing and signed by you and two uninterested witnesses. Unfortunately, telling your family how you want things to be distributed upon your death is not legally binding, and they will have to distribute your estate based on intestate distributions, which may not be what you intended. Having a written will avoids your loved ones relying on their memory and can minimize family disagreements.
- I don’t need a power of attorney, because my spouse can handle everything.
Without a power of attorney, your spouse only has access to accounts that they own jointly with you. For assets that you own solely in your name, your spouse would have no legal access to those funds during your incapacity and would not be able to help you when you need it most. Further, if you and your spouse become incapacitated at the same time, you need a back-up plan. A power of attorney allows you to appoint someone to act on your behalf to handle your financial affairs.
- I don’t need an advance directive, because my spouse can handle everything.
Your spouse can make medical decisions for you in some situations, but, what if your adult children disagree. This could end in costly litigation. An advance directive appoints someone to act as your healthcare agent to make healthcare decisions on your behalf while you are unable to speak for yourself. An advance directive also handles your end of life choices, which minimizes the stress on your loved ones when that time comes.
- I don’t need a will, because I don’t have any assets.
A will does more than distribute your assets. A will can nominate a guardian for your minor children and can alleviate the stress on your family. Although you may not believe you have assets, you may have sentimental assets. Family heirlooms are sometimes the most contentious asset after a loved one passes. Further, if you have minor children, a will nominates a guardian for them. If you do not nominate a guardian for your minor children, the court will decide who should care for your children after your death.
- I have beneficiary designations on my accounts, so a will is useless for me.
It is great if you have beneficiary designations on your accounts, because those are distributed outside of the probate process. However, you may have assets that do not allow for a beneficiary designation, such as a car, family heirlooms, and other property. Beneficiary designations can also be outdated, because you haven’t updated them since your beneficiaries predeceased you. Most institutions will distribute your assets to your estate if you do not have a beneficiary designation.
- I made a will already. I don’t need to update it.
There are many great wills that were created 10, 15, even 30 years ago, but laws have changed and people’s lives have changed. Who you chose to be your personal representative may no longer be alive, or you no longer trust them with that role. It is important to review your documents every 3 years, to make sure they still align with your wishes.