Estate planning can be a challenging process. While it is not brain surgery, deciding to move forward with an estate plan requires us sometimes to make difficult choices about the future and to face the fact that we will not live forever. This thought stops many people in their tracks. Others talk themselves out of seeing a qualified attorney to help create an estate plan because of common myths like the following.
Myth #1: Only the Rich Need an Estate Plan
When we hear about estate planning on the news or read about it on the internet, it is usually regarding a wealthy businessperson or celebrity who had no estate plan, made an error in their estate plan, or has family members who are angry about the estate plan. The topic catches people’s attention. Rich people have so much that, surely, they need an estate plan and can afford to have it done correctly. By comparison, when the average person thinks about their planning needs, they assume their possessions are not worth enough to necessitate an estate plan.
This thinking could not be further from the truth. Estate planning is about more than just money. While proper planning allows you to determine who gets your money and property upon your death, the process also addresses what happens if you become incapacitated (unable to manage your affairs) and require someone to make decisions on your behalf. If you do not have an estate plan, the court must appoint someone to make your medical and financial decisions. The process can be very time-consuming, expensive, and public. It can wreak havoc on a family if they have differing opinions about who should be appointed and how decisions should be made.
Even if your means are modest, you should consider who gets your hard-earned savings when you die. If you have no plan, state law will decide who gets what, and many times, the government’s best guess as to what you would have wanted is contrary to your actual desires—but because you did not take the opportunity to formalize your wishes in an estate plan, the state has to step in.
Myth #2: I Don’t Have to Plan Because My Spouse Will Get Everything
If you die without an estate plan in Kentucky, your spouse will not automatically inherit your entire estate. Instead, under Kentucky law, your spouse will only receive a portion of your estate. This comes as a shock to many people.
Further, some people think they do not need an estate plan because they own their assets jointly with their spouse. If a couple owns accounts or property together or as tenants in their entirety, when one spouse dies, the surviving spouse automatically becomes the sole owner. In many cases, married individuals prefer this outcome. This approach, however, comes with some downsides. While it is convenient for money and property to pass automatically to a surviving spouse, outright distribution offers no protection. What happens if, after your spouse dies, you have a car accident and get sued? If the jointly owned money and property automatically become yours solely, they are available to creditors to satisfy any judgment against you.
What if, after you die, your spouse remarries? If the brokerage account you owned jointly becomes solely your spouse’s, they can now spend it all in any way they want without considering your wishes or the next generation. Your surviving spouse’s new spouse could buy a sports car with the money you intended to pass to your children. With blended families being common today, this scenario is a genuine concern for many people.
Estate planning does not mean that you have to disinherit your spouse. Rather, it means the two of you can sit down and proactively plan what happens to your joint property and accounts when either of you dies, ensuring that the survivor is provided for and that any remaining money and property are gifted in a way that is agreeable to both of you.
Myth #3: A Will Avoids Probate
Many people believe they have avoided probate once they have created a will, whether drafted by an experienced attorney or by using a do-it-yourself solution or online form. Unfortunately, they are wrong. While a will is an effective way to designate a person to wind up your affairs after you have passed, determine who will get your hard-earned savings and property, and, if necessary, appoint a guardian to care for your minor children, a will must be submitted to the probate court to begin the process of distributing your money and property. The level of the probate court’s involvement can vary depending on the circumstances, but because the will becomes a matter of public record, the process is not private.
Summary Proceedings
In Kentucky, if the value of your estate (i.e., what you own at your death) is below a certain monetary threshold, anyone entitled to inherit from you can file a petition and have the money and property distributed without the traditional probate proceedings. The filing may require court appearances and the issuance of formal legal notices to anyone interested before your money and property can be distributed.
Supervised Probate
In supervised probate, the probate judge oversees every step of the administration process and must approve your trusted decision maker or personal representative’s actions. During supervised probate, all required documents must be filed with the probate court and sent to interested persons. The process can be very time-consuming and expensive. Each time the personal representative has to take an action, they have to file a legal form and send it to the interested parties, which, in contentious situations, opens up the possibility for disagreements and additional attorneys’ fees.
Experienced Legal Counsel for All of Your Estate Planning Needs
A properly drafted and funded trust may avoid probate in Kentucky. Whether avoiding probate is something you should consider depends significantly on your individual circumstances. The estate planning attorneys at Skeeters, Bennett, Wilson & Humphrey have decades of experience with wills, trusts, and all aspects of estate planning. Together, we can craft a one-of-a-kind plan to protect you and your family.