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Some common estate planning falsehoods

On Behalf of | Jan 12, 2021 | Estate Planning

The last thing most people want to think about is death, and yet people don’t want to depart this earth leaving their loved ones to sort out their estates. Estate planning can be a little daunting for many Colorado residents, but it doesn’t have to be, especially when fact is separated from fiction. Knowing what is needed in a comprehensive estate plan can save time and money and cause less stress on surviving family members. Professionals contend that there are some common myths regarding estate planning, and it might be helpful to know what some of those are:

  • One has to be older to have an estate plan — Every adult needs at least a will. Life can throw curve balls at any age, and it’s wise to be prepared for the unforeseen.
  • Only those with wealth and many assets need estate plans — Firstly, estate planning is about much more than financial wealth. A complete estate plan also speaks to what should happen if a testator becomes unable to take care of his or her business. Estate planning is for everyone since there is a chance that any person can become ill.
  • The assets of those who die without a will go to the state — Every state has laws of intestacy that will determine who inherits what.
  • Probate doesn’t apply if one has a will — It all depends upon if the testator owns real estate in more than one state. Those properties may have to go through probate in their respective states.

Other myths include:

  • A trust must be in existence to avoid probate.
  • Estate tax can be avoided by setting up trusts.
  • Estate tax can be avoided if a testator has little money.
  • If the testator gifts someone with more than $15,000 a year, he or she will have to pay a gift tax.

There are many misconceptions about estate planning. Colorado residents who want to have a complete estate plan in place may wish to seek the guidance of an estate planning attorney. Having a firm grasp on how estate planning works and which documents are best suited for a particular testator may make the entire process much less stressful.