Myth number one, a will allows my estate to avoid probate. This is probably the most common estate planning myth and actually the opposite is true. All property transferred by a will is guaranteed to go through probate. The probate process gives the court the opportunity to oversee the distribution of a person’s estate and ensures the decedent’s wishes are followed.
Myth number two, a life insurance payout will not trigger estate taxes. The value of your estate for purposes of estate taxes are calculated by using all of your estate’s assets, this includes any death benefit received from a life insurance policy.
Estate Planning Myths in Salt Lake City
Myth number three, and probably my favorite is that some people are too young for estate planning. Individuals should put estate plans in place upon reaching the age of 18 and update them throughout their life. None of us know when the time will come that we need an estate plan, and not planning correctly can have disastrous consequences.
And the final myth is that a revocable trust will protect my assets from creditors. There are many different types of trusts and a revocable trust is an estate planning tool that provides the owner with several benefits but protection from creditors is not one of them. The reason why revocable trusts do not protect your assets from creditors or liabilities from lawsuits is that the owner of the trust remains in full control of the assets that are put into a revocable trust.