When it comes to handling wills and estate planning, terms can get confusing. Living wills, wills, and trusts are different, yet overlap, which can make it confusing for an ordinary man to understand what they specifically are. Such kind of lack of awareness gives rise to confusion which leads to the development of myths that may completely interfere with your plans to secure your future.
No matter what your status is in life, having a solid estate plan is place is of utmost importance. Here are some myths that you must avoid when you are making your own plans:
Myth #1: A will and a living will are one and the same
One of the biggest confusions surrounding estate planning and wills and estate planning is that a testament, a last will, and a living will are one and the same. While they sound similar and fulfill the larger goal of securing financial matter around the time of your death, they each have different roles to fulfill. While a testament and a last will deal with financial actions in the aftermath of your death, and only become active once you die, living wills work as an advance directive – helping you make the choice of how your financial matters will be handled during your lifetime – and especially its later stages. They remain dormant unless you become incapacitated and unable to make or express choices even when you are alive.
Myth #2: It is important to plan a reading for a will
Thanks to the popularity of TV shows, most know about the compelling part that is the reading of a will, when the family (and maybe other possible inheritors) sit together for the lawyer to read out the will. It is however just that – fiction.
While the reading of the will makes for a very compelling and dramatic scene it has absolutely no relationship with actual laws. While your family does get to read your will after your death, it happens from a copy that they receive (in private) rather than a mass gathering an announcement.
When you die, someone (possibly your spouse or child) will have to bring your will to a probate court. Upon submission to probate court, the will would become the part of a new probate case and will be scrutinized by said court of law. Only after the court successfully determines the legal validity of the will, its terms will be enforced. If the courts deems the will invalid, the state will take over the matter.
Myth #3: A will is exclusively meant for the old, sick and/or wealthy
One of the greatest mental blocks when it comes to making wills is the fact that many people believe it is a directly reflection of human mortality and is therefore only suited for those who are close to death, and/or have a considerably large amount of wealth on their hands. Therefore, if you are not old, sick or wealthy, a will is not necessary.
Some of this is true – wills do reflect the fact that no one lives forever, and that planning ahead of time is a necessity, and people who belong to the aforementioned groups have a greater need for a will, those far away from said groups (namely young and healthy adults, and people with limited wealth) also require a will as well as an estate plan.
The truth is that despite all odds, emergencies can strike anyone at any time. Such untimely occurrences are indeed unfortunate, but the lack of proper legal devices further complicates things in the form of destructive family conflicts and haphazard actions. So even if you are someone who is not old, wealthy and/or sick, or even someone with a family, you must make sure to have a will.
Myth #4: Having a will is enough
A will is an essential document important for the purpose of estate planning (not to mention the perfect first step in the right direction), it is not enough on its own. This is primarily due to the fact that a will is a legal device that is meant to get into effect only when you die and has practically no purpose to serve when you are alive. For instance, if you are sick and require somebody to help manage your finances and health, a will would be of no use.
This is where other estate planning devices (such as estate plans and living wills) come in – each serve a specific purpose, and together, they address all aspects of your finances in all stages of your life. Do bear in mind that in order to give yourself and your family the best of benefits and protections, you must first have all the estate planning tools at hand.
Myth #5: There’s no need for a will when you can simply tell people what you want
One of the biggest myths surrounding wills is that of making an “oral will.” Often the product of fictious TV shows, many do believe that simply saying one’s wishes aloud on one’s deathbed is enough – and that a document (and all the legal proceedings that come with it) is not necessary.
This could not be farther than the truth, however. Making an oral will has nothing to do with with how modern estate planning laws function, and therefore have no legal bearing on how your property would be distributed once you die.
While some states (say, twenty of them) do allow people to make oral wills (a process called nuncupative wills), it comes with quite a few limitations. For instance, the state of Washington allows residents to create oral wills, it can only happen under specific criteria:
- The total value of the personal property be less than $1,000
- There should be at least two competent witnesses on the scene
- You must be in the last stages of your illness
- Someone must be present to write down the terms of the oral will and submit it to the probate court within 6 months of your death
- Your spouse and/or children should be notified of the oral will in order for them to be able to contest the terms.
Therefore, oral wills – even in the states where they are allowed, are no match for a drafted last will and testament.
Myth #6: Having an estate plan is enough
Having an estate plan in place is one of the best things you can do – it is a great way to make choices that will help secure the financial situation of both yourself and your family and help avoid conflict and legal hassles later.
That being said, it is definitely not enough. Estate plans need regular review and if applicable, amendments and updates in order to make sure that the choices you make have the same effect years and decades down the line.
The most common reasons why changes in estate plans are often needed are:
- Circumstances: The key purpose of an estate plan is to have a solution that fits the needs and expectations in your personal circumstances. And circumstances often do change in life – marriage, divorce, illness, financial upheavals, and family additions are some of the many reasons why circumstances can change drastically. In such cases, you must make sure that said changes are reflected on the way you plan your estate.
- Choices: Sometimes even without external circumstances, you may want or need to change your estate plan to better suit your current mindset and view on life. For instance, if you have taken a liking to philanthropic activities, you may want to have some of your wealth go to charity, and therefore will need to amend your estate plan to reflect that.
- The Law: Legal changes have considerable effects on the ramifications and sometimes even the validity of an estate plan. Legal changes in estate planning are known to happen every few years, and it is important to know if and/or how the legal changes affect you and your estate plan.
Myth #7: Having a will means a probate is not needed
One of the most dreaded parts of the legal procedure is a probate – and many who have a will in place believe that probate is not needed. Although it is no longer as time and expense intensive as it used to be, probate still is a considerably lengthy process that can last for at least a few months and cost quite a bit. And while having an estate plan in place does help in avoiding (or at least minimizing) probate, a last will or testament has no such effect.
Submission of a will to a probate court is mandatory and is a process that is bound to happen – even if you die. It is therefore better that you complete the long-drawn, but necessary process long before such an eventuality. Keep in mind that the probate is the only way for the court to determine the legal validity of your will, and for you to make sure that your choices are indeed enforced.
Myth #8: You have to leave an inheritance for your children or else they will challenge the will
Usually, there is a social obligation for parents to leave behind their property for their children – it is appropriate and expected. However, there is no legal obligation for you to leave an inheritance. There could be exceptional circumstances when you may not want your children to inherit your property.
Legally, you are free to leave your inheritance to whomever you want to. Your children can challenge the will if they don’t find themselves as an inheritor of your wealth, but it is a process that is far more complicated than it looks. For starters, they will have to meet some basic legal requirements to even be eligible to challenge a bill – this includes having a “standing,” (as in if they stand to inherit from the current as a successor), and have “grounds” for the will’s invalidity (as in, a solid and legally sound and recognized reason for why they believe that the will is not valid). Simply being unhappy with the will, however, is no ground on which they can challenge it.
Myth #9: In the absence of an estate plan or will, your property will go to the government
While It is correct that the government can and does end up being the inheritor of your property in certain circumstances (which, specifically, is a process known as escheat), said circumstances are very few and far between. In every state, the state government has laws in places that determine who is to inherit the property in the event of the lack of a will or any other kind of directive.
If you die without leaving a will, your property would be subject to laws of intestate succession, which, in simple terms means that the property will be inherited by the closest surviving relative. For instance, if you die without a surviving spouse but have children, the property would be equally divided and given to them. If you have no immediate family of your own, but have a niece or a nephew, the property would be inherited by her/him.
Escheat will only happen when the government cannot find any relative who can inherit your property in the absence of a will.