The purpose of estate planning is to make sure you and your family are prepared for the possibility of incapacity and the inevitability of death. Estate plans involve several different legal documents, including wills and trusts. These estate planning tools can be customized so they provide the best protection for you and your family. There are misunderstandings that many clients have regarding what an estate plan can actually accomplish. In fact, there are several myths regarding wills and trusts that need to be dispelled. Let our Reno trust attorneys clear up these misconceptions.
No. 1: – Only the wealthy need a will
One very common myth is that people who are young and not particularly wealthy don’t actually need a will. However, the reality is that each of us has an estate, no matter how large or small. So, everyone needs a will. An estate is comprised of all the personal property, money, bank and retirement accounts, insurance policies and real estate that you own. You can dispose of your estate through a will, but if you don't have one, the laws of intestate succession will dictate how your property will be disposed. If you want to have a say in who gets your property after your death, then you should create a will.
No. 2: – I don't have much to give away, so why create a plan?
Some people believe that, because they only have a few possessions and do not own a home, for instance, there is no real reason to create a will. What those people do not consider is that, regardless of value, personal possession can have sentimental value as well. Who should get your family heirlooms, your family photos or your wedding ring? Those are things that are part of your estate and should be considered.
No. 3: - A trust can serve as a tax shelter for the rich
Trusts are not tax shelters, contrary to what many clients think. While it is true that trusts can provide some tax benefits, they are not generally known to be tax shelters, with the exception of a Charitable Remainder Trust. That particular type of trust is intended to encourage charitable giving while providing very favorable tax treatment. The primary goal of trusts is to ensure that there will be funds available for your family in the future. Trusts can help your family avoid the probate process and prevent the need for a guardianship in the event of your incapacity.