In your twenties, it’s easy to put things off. After all, you’re young, invincible and have all the time in the world. Retirement savings, medical check-ups, returned phone calls to mom and credit card balances all seem like they can wait for another day.
And writing a will? That can wait at least until student loans are paid off, right?
Wrong, says Las Vegas estate attorney J. Taylor Oblad, managing attorney of the Oblad Law Group and UNLV basketball Twitter superfan. He says anyone who plans on dying someday needs to get their papers in order sooner rather than later.
Although the man has a vested interest in getting everyone to lawyer up against the Grim Reaper, he makes some valid points. Not quite as many points as Cal scored in its second-round NCAA tournament win over UNLV, but still, some good points. I asked him to shatter estate planning myths held by the young, and I translated his lawyer speak into relatable terms.
Myth 1. Making a will is for old people or the sick.
Oblad: “While the elderly and ill need a will, any adult needs a will, especially if you have kids. A will is the most fundamental way to ensure your assets are transferred to those you choose. More importantly, if you have minor children a will can include a guardianship which nominates a guardian to take care of your kids in case of death or incapacity of the parents.”
Translation: If you have kids, get a will to make sure your youngsters don’t end up living in a cabinet below the stairs with the Dursleys with no access to the Gringotts gold that’s coming to them.
Myth 2. Wills last forever.
Oblad: “Although a will can last forever, you should make periodical amendments to the will. At the very least, you should consult an attorney every two years to discuss changes in the law or changes in your life. However, you should review it if there is any significant life change; i.e., birth, death, purchase/sale of real estate, divorce, etc.”
Translation: Get a will, and stop by your lawyer’s office to adjust it at least as often as you buy a new video game console – if only because an estate plan that grants custody of your Xbox 360 to your best friend won’t ensure that your Xbox One finds a good home if you should pass.
Myth 3. You don’t need to consult an attorney to draft your will.
Oblad: “You would not conduct a medical procedure on yourself, so why do so many people draft wills using online software? Such software does not take your family dynamics into account. These websites assist in the draft of a “cookie cutter” will that could create unwanted consequences and could cost you more in the long run. Every family is different and unique. As such, your will should be different and unique from your neighbor.”
Translation: Please don’t buy a computer program to replace my work. I have a family to feed and UNLV basketball season tickets to buy. But seriously, I gots more will-power than any computer. Trust!
Myth 4. A trust is only for rich folk.
Oblad: “If you own any amount of money (including a life insurance policy) or a home you must have a trust. Probate is a judicial process where property is transferred from the deceased to the living. Even if you have a will, your real estate will not be able to be sold unless you go through the time-consuming and expensive process of Probate. If you transfer your home into a revocable trust prior to death, your trust is the actual owner of the property. In short, you avoid probate since you were not the owner of the real property at your death. In addition, if you have life insurance, the death benefit will be paid to your kids in a lump sum upon reaching the age of 18. I don’t know about you, but if my dad died when I was a kid and I received a $100,000+ check on my 18th birthday I would have bought a new car, clothes, and CD’s ( do kids still buy those?). A trust can be made the beneficiary of the life insurance policy and you have the power to create the manner in which the trust (via the trustees) transfers the financial benefit to your children; i.e., for education or a lump sum at the age of 25, etc.”
Translation: Draft a will, won’t ya, if only to give your poor parents one less thing to worry about if you go all James Dean. And remember that your kids will be too stupid to get your money unless you make sure they have at least as much life experience as you do now before they can flitter away all their inheritance.
Myth 5. I created a Trust so I am fine and protected from probate.
Oblad: “One of the biggest reasons I don’t like online assistance is that it only helps out in the drafting of estate planning documents. A simple executed trust does not protect you from probate. A “funded” trust is the only way you can avoid probate. When I review a trust for a client that had already been drafted the #1 issue is the “funding” of the trust. Funding is the actual transfer of title or interest to your executed trust. In short, you could draft a trust which tells your kids what to do with your house after you die. However, if you don’t physically transfer your home from yourself to the trust (usually via Quit Claim Deed or Grant, Bargain, Sale Deed) your trust is worthless and your kids will still have to go through probate to sell or rent your home. In addition, you must contact any life insurance company to switch the beneficiary from your kids to your trust if you had the intent to delay payment to your children. Funding the Trust is key.”
Translation: Seriously, computer software doesn’t need UNLV tickets, so use me! Plus, you’ll need more than just a will. It’s a lawyer-powered trust you’ll need to make things go smoothly after you pass on and they build a statue in your honor.
Myth 6. If I die without a will my spouse will get everything.
Oblad: “Not necessarily. State laws vary, but in most states, dying without a will (intestate), your assets 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. This could lead to many issues and unintended consequences. What if you have black sheep children whom you don’t want to receive an inheritance, or what if your spouse is completely dependent on your income; now the spouse will have to share necessary funds with the children?”
Translation: State laws be crazy, so make no assumptions about how they’ll handle your stuff after you go. Get a will and trust so you can lord them over your spouse and kids, and make them try to one-up each other and please you enough to make sure they don’t get written out.
Myth 7. All property should be transferred to my trust.
Oblad: “This is not true, and is another reason why an estate planning attorney should be consulted. Some retirement accounts can be transferred without probate if there is one living and named beneficiary. A trust is not a living person and thus you would still have to probate these retirement accounts.”
Translation: Smart lawyers who want to do right by you know what should happen to your money better than you do. Listen to their advice. And thank them by hooking them up with basketball tickets if you can.
What other questions do you have about estate planning? Does any of this myth-shattering surprise you?