Estate Planning For Dummies: Two Estate Planning Myths Debunked For Cape Cod Families

I’m not sure there is very much I could say that could add anything to the conversation about what happened last week in Parkland, FL. It seems that every time something like this happens, we grieve for shorter and shorter amounts of time and move on ever-more quickly to the shouting at each other over root causes.

But the fact remains that there are 17 families whose entire world has been decimated, and a community who is reeling. With the speed of social media these days, it’s easy to take this opportunity to make various points (many of them quite valid), but should we perhaps notice about ourselves and our culture that we seem to “move on” so very quickly?

I’d like to never become “numb” to such things. And so we pause to mourn with those families, even here in the midst of our Cape Cod office’s busiest season.

In times like this, I’m grateful for the moments I’ve been given with my friends and my family … and I am reminded that everything can change in an instant.

It sure brings everything into its proper perspective, doesn’t it?

Events like this can never be planned for, but nor can many of the other kinds of disasters which tend to hit families at unexpected times. Whether financial, personal, occupational, or otherwise, disaster and tragedy *does* strike every family at some point.

But problems that can intensify the disaster are ones that *can* be planned around, and sometimes we just need a reminder and the right timing to get those plans handled…

Estate Planning For Dummies: Two Estate Planning Myths Debunked For Cape Cod Families

“In every conceivable manner, the family is the link to our past, the bridge to our future.” -Alex Haley

As we have seen this past week, life can turn on a dime … and we can’t plan for every one of the specific ways it may do so. But we CAN plan broadly.

For me and my family, we’ve put some simple plans in place for a VARIETY of circumstances, not just financial or legal. And it truly helps us sleep better at night, just knowing we have it all covered.

And the unfortunate reality is that the most recent numbers indicate that almost 60% of Americans don’t have a basic will — and that’s a big problem.

One of the big reasons that most Cape Cod families don’t yet have this in place is because of some incorrect thinking about whether it’s right for them, or if it’s even necessary. And sure, some just haven’t gotten around to creating a will or trust. Others think they don’t need an estate plan because they’re not “rich”.

I’ve even heard from Cape Cod people that they don’t want to put it in place because when they do, it’s sending some sort of death wish into the universe (or some such).

But here’s the big problem — if you continue without an estate plan, you could (instead) leave a legacy of bad feelings and attorneys’ fees.

Because it is currently “tax season”, this is something that might make sense to have done once your return is filed — simply because you would have already compiled your financial documents in such a way that creating an effective plan is a bit easier.

Or maybe you are still tripping up on these myths?

Myth 1. “Only rich people prepare estate plans.”

Do you own ANYTHING? Because if so, you need a will. You see, a will allows you to designate who will receive your Cape Cod property should anything happen. Continuing without one ensures that your assets will be distributed under the terms of your state’s “intestate succession” laws. That means your money and property could end up with family members you haven’t spoken to in years, instead of who you’d really like to see control your assets.

I won’t go into all of the different components of a will, trust, health care directive, etc., as my purpose here is to emphasize that failing to plan is simply a decision to trust your assets to government bureaucrats.

Even if you think your situation is pretty straightforward, you may feel more comfortable hiring a Cape Cod lawyer to guide you through the process.

Myth 2. Everything goes to your spouse, if something happens.

Unfortunately, that’s not always the case. We take care of Cape Cod clients from different states around the country, and I can tell you that state laws vary; whether for taxes, estates, or anything else. And in most states, if you continue without a will (intestate), your inheritance will be divided among your spouse and your children. In New York, for example, when someone dies intestate, the spouse gets the first $50,000 of the estate and what’s left is divided 50-50 among the spouse and the children.

You can imagine how this could create all kinds of problems, particularly if your spouse was financially dependent on you or you have children from a previous marriage.

I’ll post a few more in the weeks ahead, but I hope you can already see that things are not always as we “think”.

I hope this helps. To your family’s financial and emotional peace…

Warmly,

Peter Arnold
(508) 771-3775
Peter D. Arnold, CPA