Myth #1: I Don’t Have Enough Assets for an Estate Plan
A common misconception is that estate planning is only for the wealthy. However, the 2024 Wills and Estate Planning Study by Caring.com highlights that 40% of Americans believe they don’t have enough money or property to justify creating a will. This belief is not only widespread but also growing, with 14% more U.S. adults in 2024 citing “a lack of assets” as their reason for delaying estate planning compared to 2023.
Interestingly, this perception is most prevalent among lower-income Americans. Those earning $40,000 or less annually were twice as likely as those making over $80,000 to feel they lack sufficient assets for estate planning. Nearly half of the respondents in this income bracket believe they don’t have enough to leave behind.
Yet, the reality is that everyone—regardless of financial status—needs an estate plan. A will addresses the crucial question: “What happens to my money, property, and loved ones when I die?” It lays out how you want your assets distributed and designates a guardian for your minor children if something happens to both parents. Without a will, state laws determine who inherits your assets and who will care for your children, leaving you with no control over these vital decisions.
While a will is essential, it’s just the starting point. Comprehensive estate planning might also include trusts and advance directives:
-Trusts: These are particularly useful for managing complex situations, such as providing for a beneficiary with specific needs or protecting assets from creditors or divorce. Trusts offer flexibility and can be beneficial regardless of the size of your estate.
-AdvanceDirectives: These documents, including living wills and powers of attorney, guide your medical care if you become incapacitated. They ensure your healthcare wishes are respected and designate someone to make decisions on your behalf.
-Durable Powers of Attorney: These allow you to appoint someone to manage your financial and legal matters if you’re unable to do so. This ensures that your affairs are handled according to your wishes, even during your lifetime.
Even if your estate is modest or your debts outweigh your assets, estate planning can still serve important purposes, such as designating who receives items of sentimental value or expressing your wishes regarding burial or organ donation. Estate planning is not about wealth; it’s about ensuring that your wishes are known and followed. So, if you think you don’t have enough assets to warrant an estate plan, think again. Estate planning is for every adult, regardless of income or estate size.
Myth #2: I Can’t Afford an Estate Plan
Another common myth is that estate planning is too expensive. According to Caring.com, the fourth most common reason Americans avoid estate planning is the perceived cost.
While the cost of estate planning can vary—ranging from a few hundred to several thousand dollars—it’s important to view it as an investment. Just as you would consult with financial advisors or accountants to maximize your wealth and minimize risks, working with an estate planning attorney can help you avoid costly mistakes that could arise if you become incapacitated or after your death.
Online estate planning services are available and often cheaper than hiring an attorney, but they come with risks. Without proper legal guidance, these services can lead to incomplete or flawed plans, potentially causing more harm than good.
An experienced estate planning attorney can help you navigate the complexities of estate law and ensure that your documents are properly drafted and detailed. This attention to detail can prevent disputes, litigation, and unnecessary costs down the road. While estate planning does require an upfront investment, the peace of mind it provides—knowing your affairs are in order and your loved ones are protected—is priceless.
Remember, the real question isn’t whether you can afford an estate plan; it’s whether you can afford not to have one.
Statistical credit toRachel Lustbader,2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/(last visited Feb. 29, 2024)
