Common Misconceptions Associated with Wills and Trusts
Proper estate planning is important for people from all walks of life, including those whose level of wealth is modest in nature. Unfortunately, there are numerous misconceptions associated with estate planning that can get in the way of individuals taking the right steps to protect their assets and provide for their loved ones.
The following are a few common falsehoods associated with wills and trusts — and the truth behind them:
- Your estate will automatically avoid probate if you have a will: The purpose of probate court is to ensure your assets get passed on to your heirs according to your wishes. If you want to avoid probate, you must use additional estate planning tools, such as a revocable living trust, to bypass probate entirely.
- You do not have enough money or assets to make a will worthwhile: Estate planning is not just for the wealthy. There are many issues that come up in estate planning beyond just how you will distribute your assets, including your end-of-life care, naming a guardian for your children and your funeral and burial wishes. Even if you don’t have many assets, you still could have specific wishes for who will get certain personal items that are important to you.
- Placing property into a trust limits your use of that property: This may or may not be true, depending on the type of trust you create. A revocable trust can be changed at any time during your lifetime, and you maintain full control of the property in that trust. An irrevocable trust would limit your use of the property within it.
- You must file a separate tax return for a revocable trust: Again, this is not true. A revocable trust is not classified as a separate tax entity and therefore does not necessitate its own tax return.
To ensure you have accurate information as you plan for the future, contact a skilled Florida estate planning lawyer with The Charles Law Office.