Most people understand that creating their estate plan isn’t something to delay. After all, life is incredibly unpredictable. However, whether you are just getting around to setting up your plan or are taking some time to update it, it’s important to remember that determining how to leave behind your legacy may not be as straightforward as you might think.
Emotions can run high during estate planning and often lead to decisions that may not be in the best interests of you or your loved ones. According to Kiplinger, here are three common misconceptions that get in the way of rational estate planning and how you can ensure your legacy reflects your wishes:
1. You should leave everything to your children
As a parent, you might feel a sense of obligation to leave everything in your estate to your children. While there’s nothing wrong with leaving a majority of your estate to your kids, it’s essential to understand that you have options and can get as creative as you’d like. Individuals should ask where their assets are best put to use after they’re gone.
2. You have to give everyone a fair share
Splitting things equally between your loved ones may seem like the easiest, logical option. You certainly don’t want to start any arguments between your relatives regarding who you favored after you’re gone. However, no requirements state that how you divide your estate has to be fair. You are in charge of who gets what and determining whether a beneficiary is responsible enough for their inheritance.
3. The goal is to reduce estate taxes
Sometimes, people get so caught up mitigating taxes in their estate plan that they forget the ultimate goal should be to distribute their lifetime assets and secure their legacy. In fact, fewer than 3% of taxpayers ever need to worry about paying a federal estate tax since the federal estate tax exemption is over $11.5 million.
Many misconceptions are surrounding the estate planning process that can keep you from fulfilling your final wishes. Remember that your key priorities should center around what will happen to your estate and your family when you are gone. The right estate planning attorney will help ensure you achieve your estate planning goals from there.