Creating an estate plan can help you ensure that your assets are distributed according to your wishes after you die. It could also protect your family from stressful legal issues during a difficult time.
Yet, many people still don’t have a robust plan in place. Indeed, according to The National Will Register, 42% of those surveyed had not talked to anybody about what should happen to their estate when they pass away.
Often, this is simply because people don’t feel they need an estate plan at their current stage of life. Other common myths also guide their thinking and discourage them from taking this important step.
Fortunately, if you can dispel misconceptions and understand the importance of putting provisions in place now, you can protect your family after you are gone.
Here are five estate planning myths you may need to be aware of.
1. You’re too young for estate planning
This is perhaps the most damaging estate planning myth. There are those who believe they are too young for estate planning and only need to consider it once they are older and more likely to face health problems.
In reality, you could fall ill or have an accident at any time. And, if you don’t have an estate plan in place, your family may face significant difficulties.
Normally, if you die without a will, your assets are divided according to the rules of intestacy. Under these rules, your spouse and children, if you have any, will likely inherit the majority of your estate.
While this might align with your wishes, other family members may not receive anything, even if you wanted them to. If you are not married, the situation could also be more complicated.
As a result, if you don’t have a will in place, your assets may not be divided according to your wishes.
Additionally, without a named executor, your family may have to apply to the courts before they can access your bank accounts and other assets. This can be a lengthy legal process that causes undue stress during a difficult time.
2. You are in a “common law marriage” with your partner
When you get married, your spouse automatically gains the right to inherit a significant portion of your estate if you die without a will.
Yet, according to the UK government, 46% of those surveyed in England and Wales believed that cohabiting unmarried couples were in a “common law marriage” and enjoyed the same rights.
However, this is a common myth, and it could lead to estate planning challenges for unmarried couples.
If you do not create a will that names your partner, they have no legal right to inherit anything from you. As such, they could be completely overlooked if you die, and other family members may inherit everything instead.
That’s why it’s important that you do not make assumptions about your partner inheriting anything and you outline your wishes clearly.
3. Writing a will is sufficient
Writing a will to give instructions about what should happen to your assets is an important part of your estate plan. However, it is a common myth that a will is sufficient on its own.
There are other crucial aspects to consider, including a Lasting Power of Attorney (LPA).
This document allows you to name a health and welfare attorney, a property and financial affairs attorney, or both to make decisions on your behalf if you are not able to. If you are seriously injured or become mentally incapable, your attorney(s) step in and make decisions for you.
Without an LPA, your family likely won’t have the power to access your bank account, pay bills, and arrange for income protection or critical illness cover payments. They may not be able to make crucial decisions about your care either.
They will have to apply to the courts before they are able to make these decisions and this can take a long time. The courts may also appoint somebody who you would not have chosen yourself.
Fortunately, by creating an LPA when you write your will, you can avoid any problems for your family and ensure that your affairs are handled by somebody you trust.
4. All your children automatically inherit part of your estate
You might assume that all your children are entitled to an equal share of your estate. However, if you are part of a blended family, that may not be the case.
When you get married in England, Wales, and Northern Ireland, your existing will is immediately invalidated. If you were to die without creating another one and your estate was divided according to the laws of intestacy, your spouse and children from your current marriage could inherit everything.
There is no guarantee that any children from a previous marriage would be included.
Alternatively, if you passed away and left everything to your spouse and then they remarried, they could potentially leave everything to children from a second marriage.
As such, it’s important that you discuss your estate plan with a professional and put clear instructions in place to account for these situations.
5. Your estate plan is “finished”
It’s a common misconception that your estate plan is “finished” once you have a will and an LPA in place.
While your estate plan may be suitable now, your circumstances are likely to change over the years. You may acquire more assets or your family could grow larger, for example. When you experience these big life milestones, your estate plan may no longer be suitable.
Consequently, you may want to revisit your estate plan regularly and ensure that it is up to date, especially after any significant change to your lifestyle or circumstances.
Get in touch
If you need guidance with creating or reviewing your estate plan, we are here to help.
Please contact us at hello@ardentuk.com or call 01904 655 330. As an award-winning financial advice company that was a 2023 VouchedFor Top Rated firm, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
