Myths of Estate Planning

Myths We Tell Ourselves about Estate Planning 

Estate planning can be a very difficult process. While it is not brain surgery, making the decision to move forward with an estate plan requires us to face the fact that we will not live forever. This thought stops many people in their tracks. Others talk themselves out of seeing a qualified attorney to create an estate plan because of the following common myths. 

Myth #1: Only the Rich Need an Estate Plan

When we hear about estate planning on the news or read about it on the internet, it is usually in regard to a wealthy businessperson or celebrity who had no estate plan, made an error in their estate plan, or has family members who are angry about the actual plan. The topic catches people’s attention. Rich people have so much that, surely, they need an estate plan and can afford to have it done correctly. By comparison, when the average person thinks about their own planning needs, they assume that their possessions are not worth enough to necessitate a formal estate plan.

But this thinking could not be further from the truth. Estate planning is about more than just money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated (unable to manage your own affairs) and someone has to make decisions on your behalf—a far more likely scenario. If you do not have an estate plan, the court will have to appoint someone to make your medical and financial decisions for you. The process can be very time-consuming, expensive, and public and can wreak havoc on a family if they disagree about who should be appointed and how decisions should be made. 

Even if your means are modest, you should designate in writing who will receive your hard-earned savings when you die. If you have no plan, probate may be required and state law will decide who gets what, and many times, the government’s best guess as to what you would have wanted is contrary to your actual desires.

Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything

For many married couples, jointly owning property and bank accounts is common. If a couple owns accounts or property jointly or as tenants by the entirety, when one spouse dies, the surviving spouse automatically becomes the sole owner. In many cases, married individuals prefer this outcome.

However, this approach is not foolproof. While it is convenient for money and property to pass automatically to a surviving spouse, outright distribution may be problematic if the surviving spouse is incapacitated at the time or dies before updating their own estate plan.

In addition, the surviving spouse might remarry. That new spouse could inherit or have access to spend the money you intended to pass to your children. With blended families being common today, this scenario is a real concern for many people. 

Estate planning allows you to proactively plan what happens to your joint property and accounts when either of you dies, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you. 

Myth #3: A Will Avoids Probate

Many people believe that, once they have created a will, whether drafted by an experienced attorney or by using a do-it-yourself solution or online form, they have avoided probate. Unfortunately, they are wrong.

While a will is an effective way to designate a person to wind up your affairs after you have passed, determine who will get your hard-earned savings and property, and, if necessary, appoint a guardian to care for your minor children, a will must be submitted to the probate court to begin the process of distributing your money and property. The level of the probate court’s involvement can vary depending on the circumstances, but because the will becomes a matter of public record, the process is not private. 

Summary Proceedings

In Ohio, if the value of your estate (i.e., what you own at your death) is below a certain monetary threshold, your representative can file an application to have the money and property distributed without the full probate process. The filing may require formal legal notices to your next of kin and anyone who might be interested in your estate (such as your creditors) before your money and property can be distributed. 

Supervised Probate

In supervised probate, the probate judge oversees every step of the administration process and must approve your representative’s, actions. During supervised probate, all required documents must be filed with the probate court and then sent to any interested persons. The process can be very time-consuming and expensive and financial information will become a matter of public record. For each step in the probe process, the personal representative has to file a legal form and send it to the interested parties, which, in contentious situations, opens up the possibility for disagreements and additional attorneys’ fees. 

Completing and maintaining a comprehensive estate plan is a gift to your loved ones. We are available to answer your questions about your specific situation, how to develop an effective estate plan to meet your objectives, and how to avoid probate.