Many people do not have a clear idea of what estate planning actually entails. Estate planning is one of the financial plans with the most widespread confusion. The confusion and mystery lead to several myths about the process. Consult with a South Jersey estate planning lawyer to clear confusion and myths regarding estate planning.
However, here are some of the estate planning myths that we often hear to eliminate your confusion and give you more clarity about the process.
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An estate Plan is Only for a Wealthy Individual.
Firstly, anyone can have an estate plan and not just wealthy people. Individuals who own properties have liquid assets or insurance dependent on assistance must have an estate plan regardless of the estate’s value, age, or marital status.
Estate Planning is all About Properties and Belongings.
An estate plan is not all about just properties and belongings. It also includes intimately personal matters. Your estate plan will help you select a person responsible for your children’s care after your death.
The Probate Process is a Nightmare.
The process of setting up an estate is, known as probate, does not deserve its bad reputation. The reputation came from the part of history when jurisdictions had fees based upon the size of the estate. But nowadays, any estate planning attorney can attest, making the process streamlined and keeping the cost control. Without a will, the property can be disposed of to the state’s laws where the deceased resided.
You Can Disinherit Anyone you Choose From the Estate Planning Process.
You can indeed cut many people out of your will, but you cannot disinherit everyone with your estate planning. In many cases, it is tough to disinherit your spouse, who has the natural right to waive the will and receive some of your estates.
Taxes Will Destroy Your Estate.
Estate taxes are real and are relatively high as 40 percent for people with estates having worth more than $5 million. Many states do not have estate taxes at all. If your estate is not more than $5 million, you will not be taxed (every year, number changes due to inflation). If you think your estate is not large enough to be subject to federal or states taxes, you should take help from an estate planning attorney.
Trusts Help you in Avoiding Estate Tax.
You cannot avoid taxes through trusts. There are some trusts which can strategize to reduce taxes. But always take legal advice before involving in trusts.