Massachusetts residents who are taking the necessary steps to be fully prepared for the future by creating an estate plan might have certain beliefs. From the outset, there are influences that dictate how wills, trusts and other aspects of estate planning are handled. Frequently, the initial belief about these documents is inaccurate. Understanding how to tailor the estate plan to fit the individual needs and avoid adhering to misconceptions is fundamental.
Commonly held beliefs might not fit a person’s situation
Among the mistaken perceptions people have when cobbling together an estate plan are how to deal with taxes, who should be named as heirs, how to split the property fairly, and if a will or trust is preferable. Taxes can significantly reduce what is left over when a person dies, but this should not be the primary focus. Currently, the estate tax exemption sits at $11.58 million for individuals and double that for couples. Not many people have this amount, so it is not something to be overly concerned about. People are advised to focus on their assets – specifically what they have. Is it cash in bank accounts? Is it a business? Is there real estate and collectibles? This is important.
One of the last things a person wants is for family members to be fighting over the estate after the testator’s death. Many believe they should simply leave everything to their children. This may not be the case. The circumstances dictate if this is appropriate. Another challenge is trying to be “fair” without truly defining in one’s own mind what that means. Dividing the assets equally may seem to be a reasonable thing to do, but it might not apply to the situation if, for example, one child is capable and willing to run a family business while the other is not.
Trusts are a popular way for a person to have a list of requirements and protective devices in place for their loved ones after death. However, it is important to know about revocable and irrevocable trusts, how assets are overseen by a trustee, if there are potential problems that could arise, and if a will would be better than a trust.
Experienced and trustworthy estate planning advice is key
People who claim to be experts or estate planning professionals might not have the person’s best interests in mind when determining how to proceed. To ensure the assets are protected and all the possible alternatives are explored to address the individual’s needs, a legal professional experienced in wills, trusts, health care directives, elder law and all other areas of estate planning may be helpful from the start.