Myths and Misconceptions Surrounding Estate Planning
Estate planning is an in-depth process that requires a certain level of experience and knowledge. While there are “do-it-yourself” options online, errors can easily occur for those who are not aware of new and existing laws.
The smallest of errors can create catastrophe for a grieving family trying to make sense of their loved one’s wishes. Inter-family disputes can create hurt feelings that grow into legally-complex and costly disputes.
Far too much is at stake to fall into the trap of believing common myths surrounding estate planning.
Leaving Everything to Children
While a typical “go-to” for those preparing their estate plan, automatically handing over money to children may not be the best use of finances. Some offspring are responsible with money, while others struggle with their own financial management. Other options can be explored that could be more beneficial. Establishing a foundation where everyone can play a prominent role can go a long way into leaving a strong legacy behind.
Equitable Distribution of Assets Is Best
After the death of a loved one, money matters can cause friction, if not an outright fracture in relationships. While they may be related, each child is different. One may have entrepreneurial skills financial savvy where leaving the family business would make the most sense. Breaking it up equally could be a “too many chefs” scenario resulting in a successful enterprise collapsing, leaving no future financial benefit for anyone.
A Family Member Should Oversee the Trust
While trusts are an effective estate planning tool, assigning a family member to be a trustee with the others as beneficiaries can create conflict. Choosing one child to have fiduciary responsibility for a revocable or irrevocable trust is a tremendous, if not an overwhelming burden. Instead, assigning a non-family member as a corporate or professional fiduciary can remove the heavy responsibility and minimize potential inter-family dissension.
The loss of a parent or parents is a devastating, potentially life-changing experience. A poorly put together estate plan only adds to the trauma that could break apart surviving family members.