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Common estate planning misconceptions

On Behalf of | May 28, 2024 | Estate Planning |

Setting up an estate plan in Kentucky is a wise decision. You probably already know this.

There are many benefits to having an estate plan. You know what will happen to your property after you pass away and the peace of mind knowing your loved ones will be taken care of.

Despite knowing the advantages of having an estate plan, you may be hesitant to set one up for various reasons. It is important to have accurate information about estate planning to erase any misconceptions you may have.

You do not need to be rich or elderly to have an estate plan

Many people assume only rich people or elderly people need an estate plan. This is simply not true. First, an estate plan is more than just a will.

Although a will is a valuable part of an estate plan, a complete estate plan could also include items such as a trust or power of attorney.

Medical or financial powers of attorney allow you to designate someone to make medical or financial decisions for you if you become incapacitated. An unexpected disaster could happen to anyone, no matter their age or financial status.

If something happens to you and you are in a coma for a month, you will need someone to pay your bills or let your doctors know your medical preferences.

Additionally, although a will specifies who receives your assets after you pass away, it also allows you to specify a guardian if you have minor children. This means estate planning is often especially important for new parents.

Overall, know that estate planning is a good idea for anyone of any age or financial status.

A will does not mean that you avoid probate

Another common misconception is that having a will allows you to avoid probate. This is not true. Having a valid will tells the probate court how you want your assets to be distributed but it does not prevent the will from going through the probate process.

The difference is that when you die without a will, your assets are distributed according to Kentucky probate laws, rather than the terms of your will.

You have probably heard that probate is a long and expensive process, which is why you might hear that having a will can help you avoid this. Probate does take time and involves some cost, but the process is generally quicker and easier if you have a will.

If you do decide to set up an estate plan, it is important to know the requirements. Kentucky law requires that you are over the age of 18 and of sound mind to execute a will.

The will must be signed by you (or another person at your direction and who was present with you at the signing). If your will was not entirely written by you, it must be signed in the presence of at least two witnesses.

There are also requirements for setting up a trust or power of attorney. A trust is a bit more complex, so it is best to have guidance when setting one up.

As with a will, trusts can be beneficial for everyone, not just the wealthy. A trust does usually allow you to avoid probate if that is one of your main goals.