Estate Planning Myths: Separating Fact from Fiction
Why can estate planning myths be dangerous?
Estate planning attorney Brian Chew, Managing Partner at OC Wills and Trusts, explained that one of the biggest dangers he sees in his practice comes from misinformation. Whether it’s advice from the internet or misconceptions passed down through conversations, families often make decisions based on myths rather than facts. Brian emphasized that his goal is to ensure clients make informed choices that truly protect their loved ones.
Is it true that the government takes your money when you die?
One of the most common myths Brian encounters is the belief that if someone passes away, the government will automatically take their money. He clarified that while the government does not directly seize assets, unclaimed funds can eventually be turned over to the state if beneficiaries do not know how to access them. For example, dormant bank accounts are often transferred to the state, and families must file claims to retrieve those funds.
Brian stressed that creating an estate plan is only part of the process. Families must also communicate and document where assets are held so that beneficiaries know how to locate them. Without this logistical planning, even properly titled assets can end up unclaimed.
Are trusts only for the wealthy?
Another misconception is that trusts are only necessary for individuals with significant wealth. Brian explained that estate planning is not just about money—it is about control and decision-making. For example, when children turn 18, parents lose the automatic legal right to access their medical information due to HIPAA regulations. Estate planning documents provide authority for medical and financial decisions, regardless of the individual’s wealth.
He noted that most families benefit from a trust, particularly homeowners in California. With real estate values high, even modest estates can trigger costly and time-consuming probate proceedings. A properly structured living trust helps avoid probate, saving families thousands of dollars and years of court delays.
Is having a will alone enough for estate planning?
Brian highlighted that many people believe having a will is sufficient. In reality, a will often leads to probate because it cannot transfer assets without court involvement. By contrast, assets placed in a revocable living trust transfer directly to beneficiaries through the successor trustee, avoiding the probate process.
While wills can still serve an important purpose—such as nominating guardians for minor children—Brian explained that relying solely on a will leaves families vulnerable to unnecessary court costs, delays, and public proceedings.
What are the risks of handwritten or online wills?
Some individuals attempt to simplify the process by writing their own wills or using online services. Brian explained that in California, handwritten wills (holographic wills) can be legally valid if they are signed and clearly express the person’s intentions. However, they often lead to complications and legal disputes.
Online wills may also produce valid documents, but they lack legal advice and fail to account for family dynamics, special needs, or “what if” scenarios. Brian compared online planning to using WebMD for medical advice: it may work in straightforward cases, but the risks are high when complexities arise.
In contrast, attorney-prepared trusts are far more comprehensive, often spanning 30 pages to address contingencies such as disabilities, substance abuse, or blended family dynamics. Brian emphasized that professional guidance ensures estate plans adapt to real-life circumstances and protect families in the long run.
What is the first step in estate planning?
Brian reassured listeners that estate planning does not need to be overwhelming. He explained that most plans begin with answering three key questions:
- Who do you love?
- Who do you trust?
- How much do you trust them?
By focusing on relationships rather than financial details, families can quickly establish the framework for a comprehensive estate plan. Brian reminded individuals that plans do not need to be perfect from the start. Decisions can be updated over time, but having something in place is far better than leaving loved ones with nothing.
How does estate planning save families time and money?
Brian compared having an estate plan to having insurance. While people hope they won’t need it right away, it provides essential protection. Unlike skipping car insurance—where one may save money until an accident happens—skipping an estate plan provides no financial benefit. Instead, it risks subjecting families to probate, delays, and unnecessary expenses.
He emphasized that estate planning costs do not decrease over time and waiting only increases risks. Taking proactive steps now ensures that loved ones are protected, assets are preserved, and important decisions remain within the family rather than the courts.
What final advice does Brian give about estate planning?
Brian concluded by urging families not to delay estate planning out of fear of complexity. Even a basic plan provides clarity and protection, and decisions can always be modified later. Working with an experienced attorney ensures that the plan is comprehensive, addresses family-specific needs, and remains effective over time.
