Myths We Tell Ourselves About Estate Planning

Myths We Tell Ourselves About Estate Planning

Estate planning is something many people keep putting off as no one wants to think about their death. However, having a properly executed estate plan in place offers peace of mind and serves to preserve your property, prevent disputes, provide for your family, address situations should you become incapacitated, and lay out your wishes to make the administration of your estate as simple as possible.

Without a clear will and estate plan, your assets will be distributed according to Missouri intestate succession laws that determine how your assets will be distributed, and the people you wish to inherit assets may not receive them. Instead, your affairs will be sorted out through the probate process, which can be public, slow, expensive, and can create conflicts among and be emotionally draining for surviving family members.

The experienced estate planning attorneys at Birk Law Firm can help prevent problems by guiding you through each step in devising an estate plan that is best for you. We can start by addressing some of the common myths we tell ourselves about estate planning.

Myth #1: Only the Rich Need Estate Planning

Estate planning is not just for the wealthy and is about more than just money. While proper planning allows you to determine who gets your money and property upon your death, the planning process also addresses what happens if you become incapacitated and someone has to make decisions on your behalf. If you have not done any planning, the court will have to appoint someone to make your medical and financial decisions for you. This can be time-consuming, expensive, and can wreak havoc if family members disagree about who should be appointed and how decisions should be made.

Even those of modest means should be able to determine who is responsible for distributing their assets and who gets their hard-earned savings when they die. If you have minor children, your plan can determine guardianship and how they will be cared for. Without an estate plan, Missouri state law will decide who gets what—and many times this is contrary to what you actually want. Because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in and do it for you.

Myth #2: I Don’t Have to Plan, Because My Spouse Will Get Everything

For many married couples, it is common to own property or bank accounts jointly. If these assets are owned jointly or as tenants by the entirety, when one spouse dies, then the surviving spouse automatically becomes the sole owner.

However, this approach can be dangerous in many situations. What happens if, after you die, your spouse gets remarried? What if your spouse has other children? If your joint accounts belong to your spouse, they can spend it all without consideration for your wishes or the next generation. Your spouse’s new spouse could spend the money you intended to pass to your children or pass it to their children and not yours. With blended families being common today, this is a real concern.

Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and plan out what happens to your joint property and accounts upon either of your deaths, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way agreeable to both of you.

Myth #3: A Will Can Keep an Estate Out of Probate

In Missouri, a will alone cannot keep your estate out of probate. While a will is a great way to designate an executor of your estate, determine who will get your assets, and, if necessary, appoint a guardian to care for your minor children, this document has to be submitted to the probate court to begin the process of distributing your money and property. The level of involvement by the probate court — and the time and costs involved — can vary depending on the circumstances. To avoid probate, more comprehensive estate planning steps are necessary, such as creating trusts and designating payable-on-death beneficiaries on your accounts and vehicles.

In Missouri, estates worth less than $40,000 may qualify for simplified probate procedures where typically someone who is entitled to inherit from the decedent can file a petition and an affidavit can be used to collect and distribute the decedent’s assets. Also, there are certain types of property that are not subject to probate and are not included in the estate value calculation for probate purposes. These include assets that are jointly held, transferred on death or payable on death and have living beneficiaries, and assets placed in a trust.

Myth #4: Estate Planning is Only for Older People

Death is less common among younger people, but it does occur, and accidents and illnesses can result in disability or incapacitation. Although it may feel too early to create an estate plan, doing so while you are young and of sound mind can ensure that your loved ones and any children will be provided for. It can also provide documents such as powers of attorney, medical directives, or living wills that state how you want to be cared for medically or whether you want to be put on life support should you become incapacitated and unable to speak for yourself.

Myth 5: Without a Will, My Spouse Will Get Everything

Without a will, a spouse may not inherit the entire estate, as Missouri’s intestacy laws (Mo Rev. Stat. section 474.010) come into play. The law provides complicated rules and who gets what depends on whether or not you have a surviving spouse, children, or family members.

For example, while your spouse will inherit your entire intestate estate if you do not have children, if you do have children together your spouse will only inherit the first $20,000, plus one-half of the balance of the estate; your children or their descendants split the remaining balance. If you have neither a spouse nor children, your grandchildren or your parents will get your property, and then the list of beneficiaries continues with increasingly distant relatives. If you have no living relatives, the property goes to the state.

Myth 6: Once I Create an Estate Plan, I Don’t Have to Deal with It

Circumstances change, and estate plans should be regularly updated to reflect changes in life circumstances, wealth, family arrangements, and laws. It is a good idea to update your estate plan every three to five years, when your goals and beliefs change, or when significant life changes such as death, divorce, marriage, and birth occur.

Myth 7: I Don’t Need an Attorney to Create an Estate Plan

While you can create your own estate plan without an attorney by using online forms, you don’t want to overlook anything or make mistakes on something so important, and you do not want to have your will or other documents challenged in court. Working with an experienced Missouri estate planning attorney ensures a plan tailored to your family’s needs that complies with local laws and regulations.

Get Help with Missouri Estate Planning

Having properly executed estate planning documents can bring the peace of mind of knowing your loved ones are protected and provided for, and you can trust the Birk Law Firm to guide you through all aspects of the process. Attorney Kelvin Birk is a Certified Public Accountant as well as a lawyer, and this combined expertise allows our law firm to have deep knowledge of the tax and financial implications that benefit you. You can count on us for personal, compassionate attention in determining what is right for you.

Do not delay. We offer a free consultation, so call us today at 573-332-8585 to get started with planning your estate.

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Attorney Kelvin Birk

Attorney Kelvin Birk

Kelvin Birk is a lawyer as well as a certified public accountant, with more than 30 years of experience in accounting and tax and business consulting, and more than 20 years of experience in numerous legal matters. This combined expertise allows our law firm to provide a level of service above that of other firms. Whatever your legal situation, your attorney at Birk Law Firm can counsel you as to the tax implications. We have experience in providing myriad legal representation services to residents of southeast Missouri and other areas.. [ Attorney Bio ]