There are a number of mistakes people make when thinking about estate planning. An experienced lawyer in the field walks us through what those main errors are.

Regular contributor to these pages, Matthew Erskine, managing partner of US law firm Erskine & Erskine, writes about some regular misunderstandings and wrong ideas that people have about estate planning. Such errors matter if it means that people pay far more tax than they need, or fail to get their inheritance plans in the right shape, causing discord and work down the line. (This publication recently conducted a video interview with Erskine.)

The editors are pleased to share these insights; the usual editorial disclaimers apply. To respond and get into the conversation, email tom.burroughes@wealthbriefing.com

Estate planning is a crucial yet often misunderstood aspect of financial management. Despite its importance, many people hold misconceptions that can lead to significant mistakes and unintended consequences. Whether it's the belief that estate planning is only for the wealthy or that a simple will is enough to avoid probate, these myths can prevent individuals from taking the necessary steps to protect their assets and ensure that their wishes are honored. In this article, we will debunk the top ten misconceptions about estate planning, providing clarity and guidance to help you create a comprehensive plan that meets your needs.

1. Estate planning is only for the wealthy
Many believe that only those with substantial wealth need estate planning. However, estate planning is beneficial for everyone, regardless of their level of wealth. Even someone who only receives social security monthly deserves to control their affairs during their lifetime and after their death. That is the essence of estate planning.

2. A will alone avoids probate
A common misconception is that having a will avoids probate. In reality, a will must go through probate, where the court oversees the distribution of assets according to the will's instructions.

3. Trusts are too complex and expensive
Some think trusts are only for the wealthy and too complicated. While some trusts can be complex, many are straightforward and cost-effective. Trusts help manage assets efficiently and protect them from creditors, including long-term care costs.

4. Executors and trustees have unlimited authority
It's often assumed that executors and trustees have unrestricted power. In reality, they have a fiduciary duty to execute your intent as expressed in your will or trust and must follow specific instructions outlined in these documents.

5. Estate taxes will take most of the estate
Many worry that estate taxes will consume a significant portion of their estate. However, most estates fall below the federal estate tax exemption limit, and many states do not have an estate tax at all. For those estates that do, there are strategies to minimize estate taxes. Income taxes often take more of an individual’s wealth, which is why a good estate plan includes income tax planning.

6. Young adults don’t need estate planning
The unpredictability of life necessitates early estate planning. Even young adults should have a plan to ensure that their wishes are honored and to avoid legal and emotional consequences for their families. They also need to consider who would act on their behalf if they cannot handle their personal affairs or make healthcare decisions.

7. The state will inherit your assets if you die without a will
If you die intestate (without a will), state laws of intestacy determine your heirs. This doesn't mean that the state will inherit your assets, but it may distribute them in a way you wouldn't have chosen if you had a will. The state only receives assets if you die with no living heirs at law.

8. You don’t need a lawyer to draft estate planning documents
While it's possible to draft some documents without a lawyer, complex situations often require legal advice to ensure that all documents meet your needs and address potential complications. An experienced lawyer can draft an estate plan that allows you to control what happens to your assets today and in future scenarios.

9. Trusts automatically eliminate estate taxes
Trusts alone do not help you to avoid estate taxes. However, certain trusts can be part of a strategy to reduce or eliminate estate tax liability. Others can reduce or eliminate income tax liabilities and protect assets from creditors.

10. You should avoid probate at all costs
Probate, the process by which assets held in your name pass to your heirs and beneficiaries, can be time-consuming and expensive in some states and situations. However, with the right estate plan, it can be much less costly and time-consuming. There are also situations where you will need someone with authority over your assets, such as when you have an asset in your name after death, or when your estate is the beneficiary of someone else’s estate.

Conclusion 
Estate planning is not just for the wealthy or elderly; it is a critical process for everyone to ensure that their wishes are honored and their loved ones are protected. Misconceptions about estate planning can lead to costly mistakes and unintended consequences. By understanding the truth behind these misconceptions, you can make informed decisions and create a comprehensive estate plan that fits your unique needs.

If you haven't started your estate plan now is the time. Consult with a qualified estate planning attorney to help you navigate the complexities and to ensure that your plan is tailored to your specific situation. Taking proactive steps today can provide peace of mind for you and your loved ones tomorrow. Don't wait – secure your future now.