Is someone in your life procrastinating about getting their affairs in order? Share this blog with them!
Don’t let these five estate planning myths keep you from properly planning for everything you’ve worked so hard for and for all of the people that are most important to you in your life.
Myth 1: Estate Planning Is For People Older Than Me
“Only put off until tomorrow what you are willing to die having left undone”― Pablo Picasso. No one knows how much time they have left. If you know you have people in your life that you care about – plan today!
Myth 2: Estate Planning Is For People With More Money Than Me
The term estate tends to evoke visions of mansions and sprawling multiacre properties. In reality, if you own a house or have a bank account and have people you care about in your life – you have an estate. Planning for those assets is important, but don’t forget that you might, one day, be unable to sign your name or talk to your physician. Effective estate planning is also planning for what happens if you are temporarily or permanently disabled. Having proper disability documents in place can make a significant difference in the ability for someone else to help you in those situations.
Myth 3: If I Have A Will, There Won’t Be Probate
A will must be probated before it has legal effect. Section 256.001 of the Texas Estates Code states that “a will is not effective to prove title to, or the right of possession of, any property disposed of by the will until the will is admitted to probate.” Probate is the legal process of proving a deceased person’s Last Will and Testament. Probate is a Latin word and means to test or to prove. Many people believe court is reserved solely for disputes – and that is where misunderstanding regarding probate can begin. It is imperative to understand that not every probate involves a dispute or contest. Sometimes the probate process concludes without any disagreement. Disagreement or not, the legal process called probate guides how assets will pass from a deceased person to their beneficiaries.
Myth 4: I Have To Pay Tax On Gifts Over $15,000 Per Year
Effective estate planning includes planning for how you are using your assets while you are still living. For some people, this includes understanding how gifting affects taxes. Many people mistakenly believe that if they give more than $15,000 per year that they have to pay a gift tax. That is not true because the current lifetime gift tax exemption is $11,700,000. The $15,000 amount is the annual gift tax exclusion; whereas, the $11,700,000 is the lifetime gift tax exclusion. It is true that if you give less than $15,000, you do not have to report that gift on a gift tax return; however, even though gifts over $15,000 a year require a gift tax return – a person won’t be taxed until their gifts exceed $11,700,000 in 2021.
Myth 5: I Can Represent Myself In Probate Proceedings
If you are named as an executor and intend to represent yourself (Pro Se), you might be surprised to find that you will need an attorney. Court rules do not allow a personal representative or executor of a will to go through the required legal process without legal representation. The reason is that a personal representative has a fiduciary duty to represent the best interests of the all the beneficiaries and legitimate creditors of the estate. Only a licensed attorney can question witnesses before the court, represent beneficiaries, and perform other acts involving the practice of law. Although courts allow limited exceptions to this rule, the result is that executors in Texas almost always have to hire an attorney to navigate the probate process.
When you are planning for all that you have worked for your entire life and all of the people that you care about you want to make sure you’ve got it right. You don’t know what you don’t know. If any of these myths surprised you, it is an example of how planning with a qualified estate attorney can make all the difference. Contact us today to share your estate planning questions.
