by Erik Hartstrom | Feb 15, 2013 | Design, Reasons To Have An Estate Plan, Top Misconceptions About Estate Planning
In this post series, we are looking at several misconceptions regarding wills. Wills have been around seemingly forever, and it’s the document most people think of when they begin to think about planning for the future. But how effective are they?
Myth No. 2. You Are Completely Covered With a Will
In reality, you are not protected in many areas by a will, and here are three examples:
A will doesn’t avoid probate
This sometimes comes as a shock to people – a will has to go through probate, meaning your heirs will have to wait months before the court approves the distribution of your estate, not to mention the extra expense and headache of going to court. More on this later…
A will doesn’t cover you if you are incapacitated
A will only takes effect when you die. A will is can’t help you if you are in the hospital, and need someone to take over paying your bills, or even talking to the doctor on your behalf. If you become permanently incapacitated, a conservatorship may even be required.
A will won’t protect your estate against creditors
In probate the opposite is true: creditors are actually protected – you are required to find and notify any creditors so they can submit claims against the estate. Any creditors of your heirs can also submit claims against what they expect to receive. All of the above problems have simple solutions contained in a complete estate plan. Are you prepared?
by Erik Hartstrom | Feb 8, 2013 | Design, Reasons To Have An Estate Plan, Top Misconceptions About Estate Planning
In this post series, we take a look at several misconceptions regarding wills. Wills have been around seemingly forever, and most people think of a will when they begin to think about planning for the future. But how effective are they?
Myth No. 1 – A Will Provides for Your Children
A will can and should specify who should be the guardian of your minor children after you and your spouse are gone. But a simple will leaving everything to your children will leave your estate locked up in probate court until the children reach adulthood. The court will require your guardian to provide an annual accounting (not a bad thing in itself). The court will also require your guardian to obtain permission from the judge before using any of the funds. If your children’s guardian is going to be able to use those funds to pay for their education and the necessities of life without having to run to court, their inheritance needs to be placed in a trust. It’s true you can create a trust for your children in a will, but that won’t solve other problems.
You are going to need a complete estate plan in order to provide for your children’s future security.
