By Rob Starr, Big4.com Content Manager
National Estate Planning Awareness week is October 17 – 23 and there’s no better way to understand the issues we’re facing as tax season looms than by smashing some of the estate planning myths that are commonly held. Thomas M. DiLorenzo, Senior Manager , Employee Financial Services at EY, took some time to walk us through some of the most widespread misconceptions.
The first one DiLorenzo dispelled was that estate planning was only for the rich.
“What we try to get people to focus on is the fact that estate planning involves a lot more than just estate taxes,” he says adding that having the proper papers in place is an essential element that sometimes gets overlooked.
“Having a combination of documents like a Living Will, Healthcare Proxy and Power of Attorney is really important for everyone regardless of the size of your estate,” he said “ because those are the real life issues that happen to everybody regardless of wealth.”
Another more familiar ingredient is the Will. These are particularly important for parents who want to name guardians for their minor children and lend themselves to shattering another myth that people only need to look at estate planning when they’re old.
While making plans to pass on life insurance and ensure your beneficiary designations are in order when you pass away is part of later-life estate planning, it’s good to make sure these items are looked after as you go through your journey in the event something happens along
Married people shouldn’t assume everything goes to their spouse automatically either. Without the right estate planning, assets may need to go through what can often be the lengthy process of probate. DiLorenzo also stresses that without the right estate planning, anyone’s estate could be exposed to state and/or federal tax.
Nothing escapes the need for thoroughness when it comes to planning your estate and even digital assets need to be considered.
“In this day and age of technology, it’s becoming more of a concern for people to make sure they have a digital assets inventory they can provide to their heirs,” DiLorenzo says.
He furthers that modern estate plans could include user names and passwords for various accounts like Facebook and Instagram to access different files.
“A lot of the things like music files people store on their computers they’ve paid for so it’s their property they can pass on,” he says.