Asset Protection Myths Debunked

An estate plan provides a number of important benefits. To the person engaged in the planning, it offers peace of mind by setting out in a legal document where his or her assets will go upon death. For the planner’s loved ones, it provides financial security and eliminates confusion about asset distribution. So why do so many people shy away from protecting their assets and creating an estate plan? Here are a number of myths that we hear frequently, and here’s the real truth, according to an experienced Long Island estate planning attorney.

Myth v. Truth

MYTH: I’m only 40. Everyone says it’s okay to wait until I’m older to set up my estate plan.

TRUTH: It’s important to have a well-thought-out asset protection plan in place, regardless of your age. Particularly if you’re married or have children, you want to be prepared for unexpected illnesses or accidents so that you have a care plan and financial security net for your loved ones. And the longer you wait, the more your assets will be unprotected from long-term care expenses and tax-sheltering financial vehicles you may be able to put in place. 

MYTH: I’m waiting to do an estate plan because I was told I can’t change it.

TRUTH: Most legal documents can be changed. Even irrevocable trusts provide more flexibility than the term “irrevocable” would lead you to believe.  In fact, your estate plan should be updated when major life events happen, such as a birth or death in the family, or when you acquire a significant asset such as real estate. 

MYTH: I already have a will, so I don’t need estate planning legal services.

TRUTH: It’s good to have a will, which is a set of instructions for your executor in regard to the disposition of your assets. BUT, a good estate plan contains a lot more than that. Most people need a Power of Attorney, Health Care Proxy, and Living Will. And, for people with sizable estates, an estate plan will minimize taxes on the assets you leave behind, and expedite distribution of them without court involvement. 

MYTH: I don’t have enough money to have an estate plan.

TRUTH: If you own a home, have moderate savings or investments, a 401k, life insurance or other notable assets, those should be protected in an estate plan. The grief of losing a loved one is much worse when hard-earned assets are reduced or lost due to poor planning.

MYTH: It’s time-consuming to create a will or trust, and I’m too busy.

TRUTH: There’s a common misperception that setting up a trust or will is a lengthy and complicated process. Though you will need to invest some time collecting documents and thinking through your arrangements, the actual act of setting up a trust or will is less complicated than you might think.  

MYTH: I’m young and healthy; I’ll get to it later.

TRUTH: Estate Planning provides protective measures in the case that something unexpected occurs. All too often, the unexpected occurs to well-meaning people who never put an estate plan into place. When you are young and healthy, you can feel that nothing would ever happen to you. However, you’re not immune from unexpected events. If you have people in your life that you care about, you must have a plan in place.

MYTH: Estate Planning is for wealthy people.

TRUTH: The protection and division of assets do play a large role in Estate Planning, but it covers many other areas that people often don’t think about. A good plan helps communicate instructions and an action plan to carry out your wishes in different areas, such as healthcare or childcare. For instance:

• What do you want to happen if you were to suddenly become incapacitated? 
• Who would you want to be in charge of carrying out your healthcare decisions? 
• Who should take care of your minor children?
• Who would you want to care for your pets? 
• Do you have a life insurance policy to help out with finances?
• What would you like your funeral or end-of-life process to look like?
• Do you want to be buried or cremated?

These issues and many more are covered in a thoughtful and comprehensive estate plan.

MYTH: I have a spouse who’ll inherit everything, so I don’t need estate planning. 

TRUTH: If you want all of your belongings and assets to go to just one person, then the estate planning process is less complicated. However, you still need a will and possibly a trust because it is the only legally-binding way to ensure that your spouse truly inherits everything as intended. In addition, you’ll want to put backup plans into place in the case that something were to happen to you both simultaneously. Both you and your spouse should have estate plans. 

MYTH: I don’t care what happens to me.

TRUTH: We hope you realize by now that an estate plan really isn’t about you. You’re creating a plan to protect your loved ones. If something were to ever happen, think of the relief your family will experience knowing that you had created an estate plan for them to carry out without confusion. In addition, you’re making sure that your legacy is placed into the rightful hands, without any impediments. That way, your loved ones can focus on what really matters – healing and honoring your memory.

Contact a Long Island Estate Planning Attorney

Now that we have debunked the most common myths about estate planning and you finally know the truth, no more excuses! Regardless of your age or the size of your estate, it’s time to put a well-thought-out plan in place. Here at Davidow, Davidow, Siegel & Stern, LLP we have been serving clients for over 100 years. We are experienced, knowledgeable, thoughtful and caring. Contact us today at  631-234-3030  to start moving forward on an estate plan that will give you peace of mind and protect your loved ones.