Separating fact from fiction in estate planning

Separating fact from fiction in estate planning

People don’t want to sit around and contemplate their demise. They also don’t want to die, leaving their loved ones experiencing more grief than they should by not having an estate plan. It is crucial that North Carolina residents take time to think about estate planning. It is possible they don’t make it a priority because they don’t really understand what an estate plan entails.

The truth and nothing but the truth

There are some common myths about estate planning people should know about since it might make it easier to begin writing an estate plan. Here are some of them:

  • Only people who are wealthy or who have a lot of assets need estate plans: This is not true since there is so much more to an estate plan than addressing financial wealth. A complete plan will stipulate what should happen if the testator is unable to take care of himself or herself. Life is unpredictable, and there is a chance anyone can become incapacitated.
  • Only older people need estate plans: Wrong again. Every adult needs to have some estate planning documents in place, such as a will and a power of attorney for personal care. This is especially true if a person has children. Who will care for them if not a parent?
  • Probate doesn’t apply if a will is in existence: Probate depends on whether the testator owns real estate in more than one state. Those properties may have to go through the probate process in the states in which they are located.
  • The assets of those who die intestate will go to the state: Laws of intestacy vary from state to state, and those laws determine who inherits what.

Here are some further estate planning myths:

  • There must be a trust in existence to sidestep probate.
  • Estate taxes can be avoided if the testator had little money.
  • Setting up trusts means probate can be avoided.
  • If the testator gives someone a gift of more than $15,000 a year, he or she will have to pay a gift tax.

With all the misinformation out there regarding estate planning, it’s no wonder some North Carolina residents put off writing an estate plan. A lawyer experienced with all of the complexities involved in this legal area will be able to help the client craft a well-rounded estate plan. When people develop a full understanding of how the process of creating an estate plan works, they may be much less hesitant about moving forward with one.

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