Common Myths Of Estate Planning – Ep 165
March 11, 2019
Our guest co-host Ted Carr is back with us for this episode number 2 of our 4 part series. On our previous episode, we discussed why elderly parents fall for scams. This time, we will talk about the common myths of estate planning.
Estate planning is one of the pillars of the strategic retirement planning concept. While it may be a task that gets misunderstood or procrastinated over, estate planning can provide a good direction for your loved ones in the future. Furthermore, it gives you a sense of relief as you think about where your household and assets go.
Now just a disclaimer here- neither Ted nor myself are experts in the field of Estate Planning. We are just here to talk about our personal experiences. You would definitely want to discuss your own situation with an attorney.
What Goes into an Estate Plan?
When Les and I met our estate attorney, she talked to us not only about our assets but also about what happens if we get incapacitated. Even our very very naughty pet bird Mr. Grant was part of our estate plan.
Nevertheless, you can revise your estate plan numerous times. Here's a list of items every estate plan should include:
* A durable power of attorney
* Beneficiary designations
* Letter of intent
* Healthcare power of attorney
* Guardianship designations
Also, you may add POLST (Provider Orders for Life-Sustaining Treatment) on your estate plan, it's an approach to improving end-of-life care in the United States, encouraging providers to speak with patients and create specific medical orders honored by health care workers during a medical crisis.
If I Have An Estate Plan, I Can Avoid Estate Taxes
The federal estate tax exemption has increased to $11.2 million per person (or $22.4 million per married couple), so it's unlikely you'll have pay to pay for an estate tax at all.
It Is Important to Include Guardianship Designations to Your Estate Plan
While many wills or trusts incorporate this clause, some don't. If you have minor children or are considering having kids, picking a guardian is incredibly important and sometimes overlooked. Make sure the individual or couple you choose shares your views, are responsible, financially sound and genuinely willing to raise children. It will give you peace of mind.
Probate is an Estate Planning Nightmare
Probate is expensive and time-consuming (will take about 2 years) and everything will be open to the public. Property is disposed of according to the laws of the state in which the deceased resided. If they find some personal information from your public records your estate could be vulnerable. The funny thing is that even though you spend all your time to have a private and personal life when you die everything is open to everybody.
I Don't Need to Check My Beneficiaries
It's one of the common mistake people do. While setting up a plan is a solid first step, keep in mind your salary and family situation can fluctuate over time. Make sure your beneficiaries are current, there are so many 401k plans that haven't had any beneficiaries. If you don't update your estate plan your beneficiary information could go out the window.
A Will Can Overview the Distribution of My Assets
60% of people have no wills. A will is also a great first step. It allows you to lay out how your belongings should be distributed. However, it has no controlling power over joint accounts or beneficiaries. The only thing that the will has any control over our assets that are in the person's name alone. You can also start with a holistic will where you write a will on a piece of paper, sign it with the date included,