Common Myths About Estate Planning
Three Myths About Estate Planning
Myth #1: Wills are not required if you are married because your spouse inherits everything anyway.
False. A spouse who dies and has children from someone other than the surviving spouse (former marriage or relationship) does not automatically leave everything to the surviving spouse. Under Florida law, the surviving spouse would be entitled to one-half of the estate and the children would be entitled to one-half. Often this scenario creates an untenable situation and much family strife. It’s often even more troubling if there is a homestead issue, which could result in the surviving spouse needing the permission of the decedent’s children to sell or mortgage the homestead. Also, children, if under age 18, are not able to inherit and a guardianship would need to be set up for each minor child.
Myth #2: Trusts are only for really wealthy people.
False. Trusts are one of the single most efficient means of transferring assets to beneficiaries without involving the courts and with the least possible costs to the creators of the trust or their heirs. Anyone who owns real estate in Florida should consider the benefits of a trust for avoidance of probate. A properly set up trust also can provide for the handling of financial and medical matters if the creator of the trust becomes incapacitated.
Myth #3: You don’t need a will or a trust if you title all of your assets properly.
False. It is true that many assets may pass by ownership as tenants by the entireties (for married people), as joint tenants with rights of survivorship, or by “payable on death” (POD) or “transfer on death” (TOD) designations. Also, beneficiary designations on life insurance, retirement accounts, annuities and pensions control over provisions in a will or a trust. But, joint ownership and sometimes beneficiary designations create other more complicated adverse problems that can be devastating. For example, naming a minor child as the contingent beneficiary on a life insurance policy or retirement account may ultimately involve a much more costly procedure — guardianship — than if an inter vivos or testamentary trust had been set up to receive insurance or retirement account proceeds for the benefit of the child.