4 Estate Planning Myths That Put Your Loved Ones at Risk

​​Surveys conducted in 2024 by Caring.com and Ameriprise Financial revealed a troubling trend: Americans are falling behind on estate planning. The Caring.com survey revealed that only 32% of Americans have a will - a 6% decline from 2023. The Ameriprise survey found that 52% of couples lack estate plans. These statistics highlight a dangerous disconnect between understanding the importance of estate planning and taking action. Let's examine these misconceptions and their potentially devastating consequences.

 

Myth 1: "I don't have enough assets to need an estate plan."

This mindset ignores that estate planning isn't just about financial wealth. It's about doing the right thing for the people you love so you don’t leave a mess, and about ensuring your wishes for your own care are considered if you cannot make decisions for yourself due to accident or illness.

If you haven’t created a customized estate plan, your loved ones could face lengthy court proceedings, unnecessary taxes, and difficulty accessing financial accounts, which could have devastating consequences if bills need to be paid.

It’s also about:

• Ensuring what you DO have goes to the people you want in the way you want (and stays out of the court process);
• Your children being raised by people you choose;
• Your wishes for your medical care are honored if you become incapacitated, or if your mind deteriorates;
• Only people you trust are able to manage your finances if you can’t manage your finances yourself, and
• Leaving your loved ones with your most valuable assets - your values, insights, stories, experiences and your love.

Moreover, a customized estate plan can minimize conflict among your loved ones. By clearly outlining your intentions, you significantly reduce the chances of misunderstandings or disputes, while also increasing the chances that your resources will be used to create a better future for the people you love.

Finally, an estate plan that works will save your loved ones time and money by ensuring the people who matter know what you have, where it is, how to find it, what to do with it when they do find it, and keeps them out of court and conflict.

In short, an estate plan is not a luxury reserved for the wealthy; it’s a necessity for anyone who has things that matter, and people who matter. If that’s you, and you don’t have an estate plan (or your plan could be outdated) let’s talk soon.

Myth 2: "My spouse and I trust each other completely."

Ameriprise's survey reveals 95% of couples trust each other with finances and 91% share financial values. When couples don’t plan because they trust each other to carry out each other’s wishes, they’re overlooking several essential matters.

For instance, trust between spouses doesn't prevent legal complications or avoid court. Without a customized estate plan, a surviving spouse may face lengthy probate proceedings, increased tax burdens, and difficulty accessing accounts. This strain can damage relationships and deplete assets meant for heirs. Even worse, if both spouses die simultaneously, the complications can be significant, especially if the spouses have children from prior marriages or minor children.

Another potential issue arises if the surviving spouse remarries. Without an estate plan, assets could unintentionally be passed to the new spouse instead of the people the deceased spouse loved. In some cases, children may even be accidentally disinherited, leaving them without the financial support their parent had planned to provide.

 

Myth 3: "Estate planning is too expensive."

Another common misconception is that estate planning is a luxury reserved for the wealthy because of its perceived high cost. The reality? Avoiding estate planning due to cost concerns can lead to far more significant time and money costs for the people you love down the road. Without a plan, your loved ones may face costly probate proceedings, unnecessary taxes, and legal disputes that can drain your estate and create additional stress for your loved ones during an already difficult time. These costs often far exceed the upfront investment of creating an estate plan.

Beyond the financial aspect, the peace of mind that comes with knowing your loved ones are protected is invaluable. A customized estate plan ensures that your wishes are carried out, your loved ones are cared for, and potential conflicts are minimized. By addressing these matters proactively, you save the people you love from emotional and financial burdens, making estate planning one of the wisest and most compassionate investments you can make, as well as the best gift you can give to the people you love.

 

Myth 4: "I don’t need to worry about who would raise my kids."

Many parents of minor children assume that in the event of their death, loved ones will naturally step forward to care for their children. Unfortunately, these assumptions are often misplaced. Without a guardianship estate plan, the decision about who raises your children will be left to a judge - a complete stranger to you and your children. And when a stranger makes the decision about who will raise your kids, it might not be the person you would have wanted. In some cases, the individual granted guardianship could have values, parenting styles, or circumstances entirely incompatible with how you envisioned your children being raised.

Another important consideration is the financial burden imposed on your children’s chosen guardian. If you haven’t created a customized estate plan and allocated sufficient funds for your children’s care, even willing loved ones might decline guardianship, leaving the court to make an even more difficult choice.

A customized estate plan alleviates the potential financial burden on your chosen guardians and ensures that your children receive the care and stability they need during an emotionally challenging time.

 

Take Action Now to Protect the People You Love

I've seen too many people suffer negative, yet unnecessary, consequences after a loved one dies. And if you haven't experienced it yourself, chances are you probably will. Take the time to think about your legacy now and contact us to create your customized estate plan.

To learn more, please contact us for a consultation at (828) 255-2728.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained separate from this educational material.