6 Myths About Estate Planning

Many misconceptions and myths surround estate planning. These myths are often the result of poor communication between consumers and media. Others are the result of misunderstandings of basic laws. Individuals with large or small estates should understand the power of estate planning to ensure their loved ones are heirs. These are six myths that estate planning is not as simple as it seems.

Estate Planning is for the wealthy only. This is often a false assumption that can lead to costly losses for the people most in need of the protection. Many people are not going to have to worry too much about complicated estate tax issues, even if they have million-dollar estates. Planning is essential for all because it involves delegating your assets and your health care to those you choose, in the event that you are incapacitated or die.

I don't have the money to pay estate taxes. Although this might be true in today's world, estates worth more than $5. A 35 percent federal tax is expected to be levied on estates exceeding $5 million in 2015. Although this may seem like a large amount, it is a reasonable number when you consider the worth of your home, retirement funds, and life insurance. A growing number of Americans are now aware that estate tax is possible.

I'm too young for planning. If you're over the legal age limit, you're not too old. We cannot predict when or if we will be unable to make our own decisions. Estate planning is very important if you have assets or possessions at all, regardless of your age.

If I do not have a will, the state can seize my assets. If a person dies, the state can seize their assets. These are the state laws that decide who gets what. You should check the laws in your state. Even if the laws are familiar, it is a good idea to still create a will in order to make sure the right people get your assets.

Estate Planning Protects My Assets. A family trust will not protect your assets against lawsuits or business risk. Family trusts and living estates are often considered "transparent" by the majority of states. Your assets are therefore vulnerable to lawsuits and other losses, just like if you have never done estate planning. These are just a few examples of asset protection. Protect any assets by hiring a specialist.

Trusts help you avoid estate taxes Most trusts will not help you avoid estate tax. A qualified lawyer can help you develop strategies to reduce or eliminate tax liability.

Estate planning is not without its problems. Baltimore Estate Planning service can help you ensure your loved ones are taken good care of after your death or that you are properly assisted in case of incapacitation.