There are many myths and misconceptions surrounding the issue of estate planning. Most of these myths are the product of sloppy communication between consumers and the media, others are from the misunderstanding of some of our most basic laws. Estate planning is a powerful tool that individuals with large and small estates must understand to ensure that their estate is awarded to their chosen recipients when they pass away. The following are six of the most common myths about estate planning.
Estate Planning Lawyer Queens is only for the Rich. This is often a costly assumption to the people who most need the protection the most. The misconception comes from the focus on estate taxes by lawyers and financial advisors, but most people will not have to worry about complicated estate tax issues as they affect million dollar estates. Planning itself matters to everyone because it involves designating your health care and your assets to individuals of your choice in case you become incapacitated or pass away.
I Don’t Have Enough Money to be Charged Estate Tax. While this may be true today, estates over $5. 4 million dollars are slated to be charged a 35 percent federal tax in 2015. While this seems like an outrageous number, consider the value of your home, retirement accounts, and life insurance. Now for a growing number Americans, estate tax is a real possibility.
I’m Too Young to Plan. If you are of legal age, you are not too young. We never can predict when we will pass away or become medically incapable of making our own decisions. If you have any possessions or assets at all, no matter your age, estate planning is still very important.
If I Don’t Have a Will the State Can Take My Assets. If a person passes away without a will, the state will defer to its “laws of intestacy. ” These are state laws that determine who gets what. The laws may differ from state to state, so learn what the laws are in your state of residency. Even if you are comfortable with the laws, you should still draft a will to ensure the correct people receive your assets.
Estate Planning Protects My Assets. A family trust won’t protect your assets from lawsuits or business risks. Most states classify family trusts or living trusts as “transparent,” therefore your assets are vulnerable to lawsuits and other losses as if you never did estate planning. Homeowner’s liability insurance, and auto insurance are a few simple examples of true asset protection. Hire a specialist to protect any specific assets.
Avoid Estate Tax with Trusts. Most trusts won’t help you avoid estate tax. However, attaining the help of qualified legal advice can help you create strategies that will reduce or eliminate your tax liability.