One of the most common misconceptions about estate planning is that it’s only about protecting assets like your cars, boats, and valuables like jewelry, antiques, and collectibles. Though the value of these assets can add up, a well-designed estate plan protects your heirs from probate court and helps ensure your wishes are honored.
Misconception: I Don’t Need A Will Because My Spouse Gets Everything
When you don’t have a Will or an estate plan, the probate laws in the state where you and your family live determine how your assets are distributed upon your death.
Reality: State Laws Differ On How Spouses Own Property
The distribution of your assets depends on whether you live in a “common law property” state or a “community property” state. Since state laws differ on how spouses share ownership of property, you need a Will and an estate plan to make your wishes clear. You also have to consider a scenario in which you and your spouse pass away at the same time. With a Will in place, you can include a contingency plan.
“Remember, an accident that leaves you incapacitated, or an unexpected death, can happen to anyone at any age.”
Misconception: All I Need Is A Basic Will
Most people make the mistake of assuming an estate plan is just about preparing for your death. But what about other situations like becoming incapacitated and unable to make decisions for yourself?
Reality: An Estate Plan Is Much More Than A Will
Even if you have a Last Will & Testament, this document only creates the foundation of an estate plan. If you suddenly become incapacitated and unable to make decisions for yourself, a comprehensive estate plan also includes:
- Durable Power Of Attorney (DPOA): This document remains in effect if you become incapacitated or unable to make financial decisions for yourself. You can select an agent and direct them to make specific decisions about your property, finances, investments, paying your bills, signing documents on your behalf, and other financial matters specified in the agreement.
- Durable Power of Attorney for Healthcare: This document names a person you’ve chosen to make your healthcare decisions according to your wishes when you’re unable to do so yourself. This is just one of several types of Advance Healthcare Directives that vary from state to state. Check your state laws to ensure you’ll have the right document.
Remember, an accident that leaves you incapacitated or an unexpected death can happen to anyone at any age. That’s why it’s important to plan ahead. Connect with an FRC® trained advisor who can help you get started by identifying your estate-planning goals.
