Top Misconceptions of Estate Planning
Updated: Dec 9, 2020
Estate planning. Just reading the words evokes feelings, fears, concerns or anxiety in people. We spend more time planning our dinner plans for a Friday evening than we do planning out what happens with our assets after we die. Furthermore, it’s an easy thing to procrastinate. Who really thinks they are going to die any time soon and who is in a hurry to go pay an attorney hard earned money for something that you hope, will not be needed anytime soon? With these reasons in mind, no wonder that research shows an estimated 71% of the population does not have an up to date estate plan. In this article, we will discuss what estate planning is and why it is important. We’ll also clear up a few common misconceptions regarding estate planning.
First, let’s actually define estate planning in plain English. Estate planning is documenting your desires for what happens with your property and minor children after you die. This can take the form of a basic will, a simple or complex trust, an election of guardian form or any combination of these and more. For the majority of people, a will takes care of the important goals for estate planning. Because a will is the most common and generally most comprehensive estate planning document, this article will mostly focus on wills and leave trusts and other estate planning strategies for a discussion in a later article. In a will, a person elects an executor, which is the person that has authority to settle the estate and take care of transferring property and possessions after you pass away. A will also states who gets what—aka the beneficiaries. Wills usually have some provisions where you can leave all of your property to your spouse or divided amongst your children in percentages or specific gifts of items or even set dollar amounts can be left to people, organizations or charities. If you have minor children, you can also make the election of who you would like to take care of your children and give the terms of a trust that will hold the property of your minor children for their benefit until they reach a certain age.
Having just a basic will drafted can be a huge benefit to your family. The basic will allows for a much easier, quicker and cheaper probate process. Many children, siblings, spouses or friends have unfortunately experienced the hassle and added expense of going through the probate process in the courts without the benefit of a will and generally they immediately meet with an attorney when they finish the process so that they do not put their loved ones in that position. Extra time, hassle and costs are only part of the problem when someone does not have a will. Lack of a legally enforceable will can create conflicts within families that are capable of tearing families apart and leaving sour feelings for years. When a person states in a will that they wish for something specific to happen, it eliminates most of these potential internal family conflicts and generally keeps the peace during a tough time. Whatever our legacy or memories of us will be, I personally do not want loved ones to remember me by how awful the experience was after I passed away and how my passing created a major family conflict. For these reasons, the main purpose of getting a will is for the benefit of your family.
Another problem situation that is horrendous for people that do not have a will is when there are children from a prior marriage or children with a different parent born prior to the current marriage. Texas marital property laws have some serious and quite often surprising consequences for people that lose a spouse that has children from outside of the marriage. As an attorney, I’ve gotten the calls from people that find out years after their wife passed away that the two stepchildren of the deceased wife now have a twenty five percent ownership claim in the marital residence. One particular case was a client that had not spoken to the stepchildren in over 5 years and then he found out that they were entitled to 25% of the paid off house that he was under contract to sell. Yikes. In that case, the wife actually had a will, but the husband had misplaced it because he did not think there was a need to probate the wife’s estate. Fortunately for him, we were finally able to locate the wife’s will and the client saved tens of thousands of dollars or more by getting his hands on that will. Sadly, cases like this are actually fairly common. I let people know that regardless of who or how you get a will, if you’re in a second marriage and especially if there are children from a prior marriage, you and your spouse need wills. Period!
Let’s go over a few common misconceptions about estate planning.
Misconception No. 1: I don’t need a will because I don’t have much money.
I’ve had people ask me, “Do I need a will, because I do not have a large estate.” Or something to the effect of, “I don’t need estate planning, I don’t have much money.” The reality is, most people could use at least a basic will. Regardless of how much money someone has or doesn’t have, a will is going to be needed if you own a home, a car, have bank accounts or if you have children. There is a system and a process in place to handle these things if someone doesn’t have a will, but the results of that system could be expensive, cumbersome or downright unfair to your loved ones.
Misconception No. 2: My husband/wife will inherit everything regardless; I don’t need a will.
While it is often the case that the spouse will likely inherit everything and this may be the desired result, if the person that died has their name on a deed for real estate, a title for a car or any other vehicle or has bank/investment accounts solely in their name, a probate will likely be necessary and the lack of a will might cost your spouse thousands of extra dollars. As much as I would like the public to hire our firm and pay us extra money, I can admit that a grieving spouse probably has better things to do with their time and money that spend time with an attorney and pay that hourly rate.
Misconception No. 3: I wrote a self-made will on a piece of paper and had it notarized so I’m covered as far as a will is concerned.
Texas law does provide for a self-made will, called a holographic will. These are legal and are usually better than nothing. However, Texas and most other states requires some specific language in a will for it to be effective and enforceable and quite often people do not research the requirements enough to draft an adequate will that will ensure the persons final wishes are carried out and provide for a smooth and less costly probate process.
This begs the question of, why do so many people not have wills? There are several factors that are responsible for people not taking the steps to obtain a legally enforceable estate plan. The main reasons are money, time, perceived hassle, and the uncomfortable nature of thinking about and planning for death. The majority of people, including estate planning attorneys, procrastinate getting a will. Usually it finally weighs on people after they have a child that is a couple of years old. As they see this baby turn into a little person, it dawns on the mother and/or father that they care quite a bit about what happens to the precious child if something were to happen to both the parents. Of course, we are talking about average people and some people are more diligent than others about taking care of these things than others. The money factor is probably self-explanatory. Who wakes up one day and says to themselves, “I want to go pay a good chunk of my hard-earned money to a lawyer for something that only matters after I’m dead?” And for the people that get past the money aspect of estate planning, it can be quite a big hassle to take off work and got with your spouse to an attorney’s office to sit down for a consult and then have to go back another day to execute the documents. Not a great sounding way to use a vacation day! Last but not least is the uncomfortableness that surrounds the topic of death. Some are superstitious about evening mentioning the subject. Others would just prefer not to dwell on the idea that someday we will die. This is a highly personal topic that I find varies greatly with everyone. Like many things in life, it’s a reality but not one that we want to look at or think about very often. Hopefully this article has shed a little light on the reasons why it is important to work through these objections to estate planning and at least be open to the idea that a will or estate plan is an essential part of life and helping out your friends and family at a time when they need it.
My partner and I were motivated to help people overcome these objections and obstacles that average people face when they do decide to get or at least look into estate planning. That is why we developed TheOnlineWill.com. We wanted a simple process to deliver quality estate planning that is convenient and affordable. There are several options for getting a will online but the majority of the resources available are simple programs that walk people through a fill in the blank process for creating a will—programs that often leave people uneasy with the final product when it’s a finished. My partner and I know quite a bit about this because we’ve both had clients over the years hire us simply to review a do it yourself will that they had made with a will maker software package or a website. While these do-it-yourself programs can be helpful, we realized that it’s the attorney experience and confidence people receive from having a real attorney involved that leaves them satisfied knowing that their estate plan is what they need for their situation.
To make the process accessible and easy, we have embraced technology to help with scheduling and conducting consults. Our clients are able to pick a time for their virtual consult that works for them and schedule the consult right on our website. We even offer flexible hours so that people that are busy or work normal 40+ hours a week can have a consult and not have to take time off of work. For this we offer several spots during weekday evenings and even times on Saturdays for clients to speak with us and get the ball rolling on their estate plan. Furthermore, because we are web based and efficient with our scheduling, we are able to keep our costs down. This allows us to pass the savings on directly to the consumers…to the common hard-working people that need estate planning the most but have not been able to get it in place due to some or all of the factors listed above. If you or anyone you know is interested in learning more, please go to TheOnlineWill.com and schedule a complimentary consult to discuss getting your estate plan in order.
Get started today by visiting our website at www.theonlinewill.com.