7 Estate Planning Myths That Are Costing People Money

Sixty-seven percent of American adults have no will. When researchers ask why, the answers cluster around a handful of beliefs: I'm too young. I don't have enough to worry about. My family knows what I want. I'll get to it eventually.

These beliefs are understandable. They are also, in most cases, wrong. Here are the seven most common estate planning myths. And what they actually cost.

Twenty minutes will not finish your estate plan. It will start it, and starting is the step 67% of adults never take. Do these in order.

1. Write down what you own and who should get it. One page. Accounts, property, vehicles, anything with sentimental weight. This list drives every document that follows.
2. Check your beneficiary designations. Log in to your retirement accounts and life insurance. If an ex-spouse or a dead relative is listed, fix it now. These designations override your will.
3. Draft your will. Use the MORTL will template to get a state-valid draft on paper. The complete guide to writing a will explains every clause and your state's signing rules.
4. Complete an advance directive. The advance directive tool walks you through your state's form. No lawyer required.
5. Open the end-of-life checklist and work through the rest at your own pace. Power of attorney, digital accounts, funeral wishes. None of it is hard. All of it is easier today than it will be for your family later.

For most people with an uncomplicated situation, one home, some accounts, everything going to obvious people, an online will service produces a valid, enforceable will. The legal test is the same either way: written, signed, and witnessed correctly for your state. Millions of enforceable wills exist that no lawyer ever touched.

Hire an attorney when any of these is true:

• Someone is likely to contest. A blended family, an estranged child, a disinherited relative.
• You want to disinherit a spouse or child. Most states restrict this, and getting it wrong makes the will fail at exactly the clause you cared about.
• A beneficiary has a disability. Leaving money directly to someone on means-tested benefits can cost them those benefits. They likely need a special needs trust, which is lawyer work.
• You own a business, real estate in more than one state, or foreign assets.
• Your estate is large enough to owe estate tax. Most are not.

The rule is simple. The attorney is not for writing the will. The attorney is for the situations where the will gets tested. If nobody will fight and nothing is unusual, the online version and the attorney version end up in the same probate file doing the same job. The complete guide to writing a will covers this decision in detail.

Estate planning is not a product for rich people. It is a short set of documents that answers four questions: who gets what you own, who raises your minor children, who manages your money if you cannot, and what medical treatment you want if you cannot speak for yourself. In practice that means a will, up-to-date beneficiary designations on your financial accounts, a durable power of attorney for finances, and an advance directive. Some people also need a trust. Most do not. That is the whole subject. Everything else is detail, and the myths below are what stop people from ever getting to it.

The reality: The younger you are, the more important a will becomes. Not less.

If you are young and unmarried, your state's intestacy laws will distribute your assets to your parents or siblings, not to your partner, your friends, or the causes you care about. If you have children, a court will appoint a guardian. Not necessarily the person you would have chosen. If you have digital assets, they may be lost entirely.

The argument that you're "too young" to need a will is usually an argument that you're too young to die. That argument is not available to the approximately 150,000 Americans under 45 who die each year.

The reality: A will is not about the size of your estate. It is about control.

Even if your total assets amount to a used car and a savings account, a will determines who gets them. Without one, state law decides. And state law does not know that you wanted your best friend to have your grandmother's ring, or that you wanted your car to go to your younger sibling, or that you wanted your savings to go to a specific charity.

More importantly, a will names a guardian for minor children. This is the most critical function of a will for parents of young children, and it has nothing to do with the size of your estate.

The reality: What your family knows and what they can legally do are two different things.

Your family may know exactly what you want. But without a legal document, they have no authority to act on that knowledge. A family member who tries to distribute assets according to your stated wishes, without a will, can be legally challenged by any other family member. Including estranged relatives you haven't spoken to in years.

Family disputes over estates are common, expensive, and deeply damaging to relationships. A will doesn't prevent all disputes, but it dramatically reduces the opportunity for them.

The reality: A will triggers probate. It does not avoid it.

Probate is the court-supervised process of validating a will and distributing an estate. A will is the document that tells the probate court what to do. Without a will, the court uses state intestacy law instead. Either way, the estate goes through probate.

To actually avoid probate, you need different tools: a revocable living trust, beneficiary designations on financial accounts, joint ownership with right of survivorship, or transfer-on-death deeds for real estate. Many people are surprised to learn that their carefully drafted will does not protect their family from the probate process.

The reality: For many people, a will alone is not enough.

A will covers assets that are in your name alone, without a beneficiary designation. But many significant assets, retirement accounts, life insurance, bank accounts with payable-on-death designations, jointly owned property, pass outside the will entirely. If your beneficiary designations are outdated (an ex-spouse, a deceased parent), the assets go to the wrong person regardless of what your will says.

A complete estate plan includes: a will, updated beneficiary designations on all financial accounts, an advance directive (healthcare proxy and living will), and a durable power of attorney for finances. For people with significant assets, minor children, or complex family situations, a trust may also be appropriate. If you haven't written a will yet, the complete guide to writing a will walks you through every step.

The reality: It depends on the state, the assets, and the family situation.

In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin), spouses generally own half of all assets acquired during the marriage. But even in these states, separate property, assets owned before marriage or received as gifts or inheritance, does not automatically go to the surviving spouse.

In common law states, the surviving spouse's share depends on whether there is a will, whether there are children from a previous relationship, and the specific state's intestacy laws. In some states, a surviving spouse may receive as little as one-third of the estate if there are children.

If you are in a same-sex marriage, a domestic partnership, or a long-term relationship that is not legally recognized as marriage, the automatic protections are even weaker. A will is essential.

The reality: Basic estate planning is less expensive than most people think. And far less expensive than dying without it.

A basic will through an online service like Trust & Will, Fabric, or LegalZoom costs $100–$300. A comprehensive estate plan from an attorney, will, advance directive, power of attorney, and trust if needed, typically costs $1,500–$3,000 for a couple.

Compare this to the cost of dying without a plan: probate fees (typically 3–7% of the estate), attorney fees, court costs, and the cost of family disputes. On a $500,000 estate, that percentage range alone is $15,000 to $35,000, and every dollar of it comes out of what you meant to leave behind.

Estate planning is not an expense. It is an investment that pays returns to the people you love. And the cost of not doing it is not just financial. It is the regret of leaving the people you care about with a mess instead of a plan. That kind of regret is worth reading about in The Grief of an Unlived Life.