Estate Planning Myth No. 1

Probably the most common estate planning myth I see is the belief that a person does not own enough to justify estate planning. This is absolutely untrue. Every adult should have, at a minimum, a power of attorney for finances and an advanced health care directive. These documents will specify who can make financial and medical decisions for you, respectively, should you be unable to do so yourself due to incapacity. The advanced health care directive also gives the signer the ability to specify what types of health care he or she wants, including instructions regarding end of life treatment. In addition, every adult should have at least a will to specify who will receive that person's stuff when that person passes. Detailed instructions, such as those found in a will, can go a long way to heading off any conflict after death. Finally, in California at least, everyone who owns real property and/or has more than $100,000 in assets should consider a living trust. The main feature of the living trust is to avoid probate after death, a process that, in California, is expensive and takes a long time. More on these documents later.