Every estate plan in Texas is different because estate plans are as unique as a family and its assets. However, there are some common estate planning misunderstandings that seem to pop up more frequently than others. Here are some estate planning myths that a lot of people think are fact.
Myth #1: More money makes estate planning more complicated
While it’s true that some estate plans are more complicated than others, they aren’t more complicated because more money is involved. Rather, it’s the number and nature of assets a person owns that determine how complex their estate plan will be.
If you only had one checking account with $1 million, for example, your estate plan would be relatively easy. On the other hand, a person with a much smaller net worth who has several bank accounts, businesses and investment accounts would have a much more complicated estate plan. Your estate plan may also be more complicated depending on the number of beneficiaries you have.
Myth #2: Updating a will solves everything
Your will is an important document in your estate plan, but updating it does not automatically alter what’s written in your other estate planning documents. For example, your power of attorney does not change just because you updated your will.
Myth #3: Powers of attorney are effective after death
You may have created powers of attorney that give trusted family members control over some of your financial accounts. After you die, however, these powers of attorney automatically end. When people don’t understand this key fact about powers of attorney, they often forget to update other aspects of their estate plan.
Estate planning shouldn’t be rushed
You should think carefully about your estate plan and perhaps discuss the details with a financial advisor. Rushing the process of estate planning can lead to expensive mistakes.