As an attorney who has a good deal of criminal defense experience, it is not uncommon for me to hear some strange things from clients about the law that they heard from their cell mate while sitting in jail, which turns out to be entirely false. Criminal law is far from the only legal area where people believe they know the law because they heard something from their Uncle last Thanksgiving, and we're going to have a look at 5 myths about Estate Planning.
Number 1: If I don't have a Will in place, the government will take all my money when I die.
If you die without a Last Will & Testament, this is known as dying “intestate.” If you die intestate, the State of Nebraska has already decided who will inherit your assets via Nebraska Intestacy Laws. Unfortunately, the rules of intestacy may not be consistent with how you want your money and property distributed. For example, the intestate estate of a deceased spouse is shared by the surviving spouse and his or her children, with the surviving spouse in a non-blended family (i.e., any children are biologically related to the surviving spouse and the deceased spouse) receiving the first $100,000 of your estate with the remainder being split 50/50 between your surviving spouse and your children, instead of all going to the surviving spouse. To avoid this result, it is best to have a Will or Revocable Living Trust in place to ensure your money and property are distributed according to your wishes.
Number 2: I have a Will, so I have a solid estate plan.
Having a Will can be an important part of your estate plan, but you should remember that your Will doesn't go into effect until you pass away, meaning a Will does nothing for you while you are alive (other than offer you Peace of Mind, which may be sufficient for your situation). However, if you wish to plan for your potential incapacity, you need to consider updating to a Revocable Living Trust and/or obtaining both a Durable Power of Attorney and a Healthcare Power of Attorney.
Additionally, you need to keep in mind that a Will or a Revocable Living Trust does not affect non-probate assets, such as jointly owned bank accounts, or a home that is owned jointly with rights of survivorship. Non-probate assets do not have to go through Probate after your death when they are jointly held with another or are payable to a named beneficiary. As such, you must make sure that your non-probate assets are set up to pass on to the right person or place when you pass. You wouldn't want a life insurance policy to get paid out to your ex-spouse because your forgot to change the beneficiary designation, right?
Number 3: I made my own Will with a form I found on the internet, so it must be legal.
Sadly, using a form you found on the internet to prepare your Will does not guarantee that your Will is valid. In order for a Will to be valid, it must be signed consistent with the legal requirements of Nebraska law. In Nebraska, a Will should be both notarized and witnessed by two disinterested witnesses in your physical presence; this amounts to “self-proving” the Will in Nebraska, which makes probating the Will go more smoothly. I say “should” as to both notarization and observation by two disinterested witnesses as a Will does not have to be “self-proved” and can be considered valid with only notarization, though this may result in additional problems if someone contests the validity of the Will.
If you don't follow the law in Nebraska when preparing a Will, a Court may find your Will to be invalid, which you certainly don't want to happen. Whether you found a form to prepare a Will on a random website, or if you have opted to use a website that will prepare a Will for a small fee, leaving an attorney out of your Will preparation can lead to costly and unintended consequences down the road. To ensure that your Will is valid and that it will result in your money and property going where you want, it is worth the extra money to enlist the assistance of an experienced attorney for your Peace of Mind.
Number 4: I have my assets in a Trust so they are protected if I go to a nursing home.
Transferring your money and property to a Trust can potentially be an excellent strategy to protect them from having to be sold to pay for nursing home costs. You have to be sure, however, that the Trust is an Irrevocable Trust that is properly drafted to protect your assets. If your Trust is a Revocable Living Trust, wherein you retain total control of the assets within the Revocable Living Trust, such a Trust provides little or no protection of your assets from nursing home costs, or other creditors, for that matter.
Number 5: Since we're married, I can handle my spouse's affairs.
Generally speaking, you and your spouse are separate individuals who can only make financial decisions for yourself. As an exception to this generally rule, if you and your spouse share a joint bank account, for example, you can both add or withdraw funds from the account without permission from the other spouse. However, if you own an asset individually, such as a bank account that is in your name only, the account is not controlled by your spouse. If you want your spouse to be able to handle your financial affairs while you are alive, a Durable Power of Attorney is recommended. It should be noted that a Durable Power of Attorney will likely no longer be honored after you pass away, so if you own a bank account in your own name and pass away, it is very likely that your spouse will have to undergo a probate action in order to be able to access that account.
Take steps to give yourself, and your family, Peace of Mind today by ensuring that your Estate Plan will do exactly what you want it to do. Contact Clinch Law Firm, LLC to schedule a consultation at our York, Nebraska office, or feel free to schedule a complimentary 30-minute telephone consultation or a 60-minute in-person consultation for a time that works for you here: Appointment Scheduler. Virtual appointments are also available, upon request.