Law Article: 15 MYTHS ABOUT ESTATE PLANNING

by Fred Hochsztein, Esq. and Emily Harrison-Jolly, Esq.

As probate attorneys, we find that many people fail to prepare estate planning and emergency documents because they believe certain myths regarding this process. As a result, they fail to execute the proper documents and leave their fates up to the rigid dictates of Florida law. Oftentimes the ones who suffer are the intended beneficiaries and loved ones who are forced to resolve problems caused by lack of planning. Here are some of the more common misconceptions people seem to have about estate planning.

1. If I do a will, I’m going to die, or conversely: If I don’t do a will, I won’t die!

Some people would go to any lengths to avoid even thinking about their own mortality or vulnerability. It goes without saying that avoiding the issue of making a will does not make us live forever. And despite superstitious feelings, in our experience, making a will does not hasten one’s demise.

2. I am too young to worry about this stuff...I have plenty of time. Besides I don’t have enough money to even have an estate.

One need only look at the news to realize that some people die at a tragically young age. While a young person may not have amassed a fortune, he or she usually has preferences as to who will receive whatever assets he or she has accumulated. Furthermore, one of the purposes of a will is to anticipate the unforeseen, including the possibility of receiving some sort of windfall.

3. If I die without a will, the state will get my assets or the court will decide anyway.

While the state of Florida will, in all likelihood, not get your assets after you die without a will and no judge or state bureaucrat will make discretionary decisions about who gets your assets, there is an extensive state statute governing intestate estates (estates without a will), and this law of intestacy determines who will get your assets. You may not agree with who will receive your assets under these laws, and the only way to avoid this result is with proper estate planning documents.

4. I don’t need a will-it all goes to the government and taxes anyway.

Under current federal and Florida law, there are no estate taxes due unless the person leaves more than $2,000,000 in net assets. This amount will increase to $3,500,000 in the year 2009.

5. I don’t need a will-it will all go to my spouse anyway.

Assets don’t automatically go to your spouse unless they are titled in the name of both the husband and wife. Florida’s intestacy law provides that the spouse will only receive all the assets if there are no children. In the event that there are children, the spouse will only receive half (and possibly $60,000 and some additional benefits).

6. I don’t need a will-I trust my family to divide it all up and respect my wishes.

Any probate attorney can point to numerous cases of families fighting over assets after a person has died. Families dealing with the strong emotions that arise in the wake of a loved one’s death do not always behave in rational ways, and all too often property becomes a proxy for deeper issues.

7. I don’t need a lawyer to do my will. Besides it costs too much for a lawyer to do it.

Making a mistake on a will can negate the validity of the entire will. While it is true that there are books and software on how to prepare your own will, oftentimes these sources of information are too general to ensure that they comply with specific Florida law. Besides, a lawyer will review the specific facts and tailor the document to the specific needs of the client. Usually the fee for the service of preparing will documents will not be prohibitive and the cost of making a mistake usually outweighs the cost of seeking expert help.

8. Once I make a will I never have to think about it again.

People’s lives change and so do their needs and intentions. Estate planning documents should be reviewed periodically to ensure that they continue to reflect one’s wishes and needs.

9. I must leave a legacy to my children.

There is no rule, written or otherwise, that states that a person must leave everything or even anything to his or her children.

10. There is a “right” way to make a will.  I am supposed to leave everything to my family.

The only applicable rule is that there is no rule about who should receive a person’s assets. The decision has to come from the heart and mind of each individual. You can leave assets to friends, family, charity, even pets!

11. If I don’t leave something to all my kids, the will can be contested.

There are only five grounds for contesting a will: Improper execution of the will, incompetence on the part of the person making the will, fraud perpetrated on the maker of the will, duress being placed on the maker of the will and undue influence by one of the beneficiaries (which means a beneficiary improperly arranging for the preparation of the will and essentially dictating its terms). A close relative can’t challenge the will merely because they have been excluded.

12. A will is the only estate planning document I need.

In addition to a will, a person can prepare documents to assist their family in the event of an emergency other than death, such as the following: Durable Power of Attorney (naming someone to manage one’s financial affairs in the event of disability), Designation of Health Care Surrogate (naming someone to make medical decisions when one is unable), Living Will (specifying one’s wishes regarding life prolonging procedures in the event of a terminal condition, end state condition or vegetative state), and Declaration of Preneed Guardian (Specifying who should be one’s guardian in the event the court is called upon to name one).

13. If I have a will, my estate won’t have to go through probate.

Probate is a system whereby the court supervises the distribution of assets to the proper creditors and beneficiaries of an estate. While many people might prefer court oversight over the distribution of their assets, they must realize that the cost of probate is usually 3% of the assets. Executing a will does not eliminate the requirement of probate proceedings.

14. There is no way to avoid probate.

Probate court may be avoided by transferring assets while the person is still alive either to the intended beneficiaries outright or by transferring assets into joint names. However, this method often has serious repercussions including gift tax ramifications, effects on Medicaid eligibility and the loss of control over assets. A better method to avoid probate is to transfer assets into a revocable living trust whereby the maker of the trust retains control over their assets, gets all the benefits of the property and can change the terms of the trust at any time.

15. Going to the lawyer for a will is worse than going to the dentist.

In order to prepare one’s documents one must see the lawyer two times: Once for a consultation and the second time to sign the documents. It is not necessary to prepare an inventory of assets, or collect other documentation. The client just needs to be prepared to discuss their intentions and to make decisions.