ISSUE #25
Common Estate Planning Myths

There are many inaccurate myths about estate planning, and, if you believe some of them, they could cause considerable hardship for you and your family. Although you may not like to think about the end of your life, proper planning is an act of compassion toward your loved ones. Here are a few myths and misconceptions that can cause trouble:

1. We Have Plenty of Time -- The notion that estate planning can wait indefinitely is quite dangerous. Even though we all expect to live to a ripe old age, we never really know when we will die or become incapacitated. Every day of procrastination is a gamble. The only way to ensure that your final affairs will be handled properly is to get your planning done now.

2. Estate Planning is Expensive -- Some people avoid meeting with a lawyer because they fear high fees. In fact, the legal fees for the essential estate planning documents you need are surprising low. Many lawyers will provide you with a basic set of documents, including a will and advance directives for $200-$300. That is a very small price to pay when compared to the potentially high costs of leaving an unplanned estate.

3. I Can Do it Myself -- This may seem like a good way to save some money, but writing your own will can create some serious problems. Although you can buy fill-in-the-blank will forms, or even a software program that writes wills and trusts, these short-cuts can cause more harm than good. When you write your own will, you are depriving yourself of the expertise and skill of the professional estate planner, who is trained to analyze your own unique situation and then plan for any potential problems. And, in many states, such as Ohio, a “self authored” or holographic will is not considered valid.

4. Estate Planning is for the Wealthy -- Everyone needs basic estate planning, not just the wealthy. The important goals of preserving your family’s security, fairly distributing your assets, arranging charitable gifts, and planning for your possible incapacity apply to everyone, regardless of their wealth. In fact, you may need estate planning even more than the wealthy, who are better able to afford the high cost of poor planning.

5. Our Children Will Share -- This misconception has caused a lot of unintended grief and hardship. The idea that you can leave everything to one child, who will then fairly distribute the inheritance to your other children, often fails in practice. In many cases, the children receiving the inheritance have not fairly shared it with their brothers and sisters. Even when they try to do the right thing, innocent misunderstandings can lead to severe family discord. Your children may also sustain unnecessary tax burdens when redistributing inherited assets. This is an unfair and potentially explosive problem to leave for your loved ones.

6. Joint-Ownership is Better Than a Will -- Some people try to avoid estate planning by naming a son or daughter as the joint owner with right-of-survivorship for their home, their bank accounts, and their investment accounts. Without guidance from a skilled attorney, this plan can backfire and cause you to lose those assets while you still need them. It can also cause unintended tax problems for both you and your child. This is a case where you can be risking a lot to save a little.

7. It’s Not My Problem -- The worst approach is to simply ignore the need for estate planning with the excuse that “someone else will have to deal with it.” This imposes an enormous burden on your surviving family members, forcing them to deal with your unplanned financial and legal matters during their time of mourning. Instead of finding your affairs in good order, they must sort through your papers, bills and statements, often spending many hours to organize your estate. That is not a nice legacy to leave loved ones, and it can be easily avoided with some simple and inexpensive planning.

This publication has been prepared as an educational resource to help the reader identify areas of potential concern. The publisher is not engaged in rendering legal, accounting or other professional services. The information contained in this publication should not be acted upon without first obtaining the advice of a professional adviser. 2004 © Florida Philanthropic Advisors, LLC. Material may not be used without permission.

You may wish to access NEW information this month at: www.ashland.edu/estate and “click” on “Planned Giving” in the left hand column.

Our planned giving director, Paul Ditlevson, can be of tremendous service in helping you integrate your giving goals with your overall estate plan. He can also help you prepare to visit your attorney. You can reach Mr. Ditlevson by calling 419-289-5090 or by email to pditlevs@ashland.edu or regular mail at 401 College Avenue, Ashland, OH 44805.