New York Estate Planning & Elder Law Blog
A large number of individuals are confused about some of the complicated issues involved in estate planning. It is critical, however, that individuals understand all of the details about estate planning. Failure to properly understand the estate planning process can result in individuals facing some substantial difficulties including improper administration of assets.
Myth 1 – A Last Will and Testament Avoid Probate
In actuality, in the state of Florida, even if a person writes a Will and Last Testament, the individual is still required to make sure that a decedent’s assets are passed to the proper heirs and beneficiaries.
Myth 2 – If An Estate Is Under $5,4500 there Is No Revocable Trust Needed
The truth is that $5,450 is the amount of assets that can pass to beneficiaries without a federal estate tax being placed on the amount.
Myth 3 – Revocable Trusts Require Separate Tax Returns
In reality, a revocable trust is not viewed as a separate entity for tax purposes. As a result, a person is not required to file a separate tax return for a revocable trust.
Myth 4 – Families Can Be Trusted
While many individuals expect their family members and loved ones to honor their estate plans, this is not always so. If a person wants something particularly to happen as part of their estate plan, it is often important to make their desires particularly clear.
Myth 5 – Estate Planning Is Only for the Wealthy
Estate planning should be considered by all individuals including the wealthy. Individuals who have any type of asset or belonging should use estate planning to make sure that whatever they have goes to the person of their choosing.
Myth 6 – Only the Old Need to Worry About Estate Planning
Unfortunately, even young people can be suddenly impacted by catastrophes that leave them incapacitated or result in their deaths. Creating an estate plan as soon as possible is a wise idea to make sure that a person accounts for sudden accidents.
Myth 7 – Wills Are All That A Person Needs
While a will and last testament is the most common type of estate planning tool, individuals should look beyond just wills when creating an estate plan. Some of the other reasons why individuals need other estate plans including creditor protection, catastrophe protection, disability planning, and remarriage protection.
Myth 8 – Trusts Are The Only Way to Avoid Probate
It is true that many individuals use trusts to avoid the probate process. There other less expensive and easier options, however, for avoiding probate. 401(k)’s, IRA, and retirement plans avoid probate provided that one of the beneficiaries listed in the document is listed.
Contact an Experienced Estate Planning Attorney
If you or a loved one needs assistance with estate planning, it is often a very wise idea to speak with a knowledgeable estate planning attorney who is familiar with these myths and many others.