For many, the idea of discussing estate planning is emotional and the process may seem difficult. This is understandable since making the decision to move forward with planning requires us to face the fact that we will not live forever. Our own mortality tends to lead to many individuals avoiding the topic all together and delaying the process to schedule an appointment with an attorney. While you should be emotionally prepared to sit and discuss your planning with an attorney, don’t let any of the following myth’s delay scheduling your appointment:
Myth #1: Estate Planning is Only for the Wealthy
When we hear about estate planning on the news or read about it on the internet, it is usually in regards to a celebrity who failed to plan ahead, had errors in their plan or maybe left behind angry family members who are fighting over the assets. The topic catches people’s attention: Rich people have so much that surely they need planning and can afford to have the planning done correctly. By comparison, when the average person thinks about their own property and planning needs, they assume that it is not necessary because they do not have anything close to Prince or Aretha Franklin’s fortunes.
However, this could not be further from the truth. Estate planning is about more than just how much money you have. While proper planning allows you to determine who will inherit your property upon your death, the planning process also addresses what happens if you become incapacitated, can protect your beneficiaries from potential creditors, nominate guardians for minor children and more. If you fail to plan ahead then you will leave the power to appoint someone to the courts. This can be very time consuming, expensive, and public. It can also wreak havoc on a family if they disagree about who should be appointed and how decisions should be made.
Even for those of modest means, who gets your hard-earned savings when you die is an important consideration. Without any planning, state law will decide who gets what—and many times, the state’s plan for who will inherit your estate is contrary to what you actually want. But, because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in and do it for you.
Myth #2: I Don’t Need an Estate Plan Because My Spouse Will Get Everything
For many married couples, it is common to own property or bank accounts jointly. If these assets are owned jointly or as tenants by the entirety, when one spouse dies, then the surviving spouse automatically becomes the sole owner. In most cases, this is the desired outcome for married individuals.
However, this approach can be dangerous. While it is convenient for assets to pass automatically to the surviving spouse, this outright distribution offers no protection. What happens if, after your spouse dies, you get into a car accident and are sued? If the assets you owned jointly automatically became yours alone, this money and property are available to satisfy any judgment that could be entered against you resulting from a lawsuit.
Additionally, what if, after you die, your spouse gets remarried? If the brokerage account you owned jointly becomes your spouse’s only, your spouse is now able to spend it all in any way he or she wants without any consideration for your wishes or the next generation. Your spouse’s new spouse could go out and buy a sports car with the money you intended to pass to your children. With blended families being common today, this is a real concern for many people.
Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and plan out what happens to your joint property and accounts upon either of your deaths, 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 using a DIY solution or online form— they have successfully avoided probate. This is not true.
While a will is a great way to designate a person to wind up your affairs once you have passed, determine who will get your hard earned savings and property, and appoint a guardian to care for your minor children, this document has to be submitted to the probate court to begin the process of distributing your property. The level of involvement by the probate court can vary depending on the circumstances, but this process is not private, as the will becomes a matter of public record.
Summary Administration: In Florida, if the value of the decedent’s estate (i.e., what they owned at their death) is valued below $75,000, then anyone who is entitled to inherit from the decedent (or qualifies as an interested person pursuant to Florida law) can file a petition to initiate proceedings. The filing may require a court appearance and formal legal notice to anyone who might be interested before allowing your property to be distributed. A notice to creditors may also be required among other requirements which is why it’s always best to consult an experienced probate attorney.
Formal Administration: In Florida, if value of the decedent’s estate exceeds $75,000 then a Formal Administration will need to be initiated. A three month creditor period is mandatory and a personal representative must be appointed. Formal administration can be both time consuming and expensive.
If you have questions regarding estate planning, the estate planning process, or probate, then please contact our firm. Together, we can craft a one-of-a-kind plan to ensure that you and your family are properly protected and all of your goals are accomplished.