Myth 1: Estate Planning is Just for the Wealthy
Many people in Indiana mistakenly believe that estate planning is only for the rich. This couldn’t be further from the truth. An estate plan isn’t just about money; it’s about protecting your loved ones and your wishes, regardless of your net worth.
Even a simple plan can include documents like a Last Will and Testament which controls the disposition of assets that are not jointly owned or have a beneficiary on them; plus can name a guardian for your minor children, and a Power of Attorney for financial/economic decisions and a Healthcare Representative Appointment for healthcare decisions on your behalf if you become incapacitated. Without these documents, a court would make these critical choices for you. This could lead to a long, costly legal battle, and the decisions made may not align with your wishes and values.
Myth 2: A Will Avoids Probate
A common misconception is that having a will allows your assets to bypass probate. The reality is that a Will is a letter to the court, telling it how to distribute your property. This means your Last Will and Testament still go through the probate process. In Indiana, probate can be time-consuming and expensive, often taking six months to a year or more. It also makes your estate’s details public record.
For those who want to avoid probate, naming beneficiaries and transfer/payable on death to a beneficiary(ies) or possibly a revocable living trust in certain situations are popular options. This allows assets to be distributed privately and efficiently outside of the court system.
Myth 3: My Family Will Automatically Know What to Do
Hoping your family will “just know” your wishes is a risky gamble. In the absence of an estate plan, Indiana’s intestacy laws will dictate how your assets are distributed. For instance, if you die with a spouse and children, your spouse may only receive about half of your estate, with the other half going directly to your children. This can create unintended financial hardship and family disputes.
Without clear instructions, your loved ones might not know where to find important documents, accounts, or digital assets. Communication is key. Take the time to discuss your plans and ensure your family knows who to contact and where to find the necessary information, such as your documents, passwords, or a list of your accounts.