Understanding Common Estate Planning Myths — And What’s Actually True

Estate planning is one of those topics surrounded by persistent myths and misunderstandings. From assumptions about how trusts work to confusion around what estate planning actually covers, these misconceptions can create unnecessary complications. By taking a closer look at several widespread myths, you can better understand how to build a plan that genuinely protects your wishes and your loved ones.

Myth #1: Setting up a trust automatically shields your assets

A frequent point of confusion is the belief that the simple act of establishing a trust provides instant asset protection. In reality, a trust only serves its purpose when it’s properly funded. This means that your property, accounts, and other assets must be legally retitled or transferred into the trust. Until that happens, those items remain subject to probate, tax exposure, and potential creditor claims.

You can think of a trust as a container. It’s a structure designed to hold and manage assets, but it does nothing until something is placed inside it. An unfunded trust is essentially empty — it cannot help you avoid probate and does not offer the safeguards many people assume it provides. The effectiveness of the trust depends entirely on completing the asset transfer process once the document is created.

Myth #2: Estate planning only matters after you’re gone

Another common misunderstanding is that estate planning is purely about distributing belongings after death. While that’s certainly a part of it, a true estate plan is just as important while you’re alive. Much of the planning process involves preparing for situations where you might not be able to manage your own affairs.

A strong estate plan includes documents that authorize trusted individuals to make medical and financial decisions on your behalf if you become unable to do so. Tools such as advance health care directives, medical and financial powers of attorney, and HIPAA waivers help ensure continuity and clarity in moments when quick decisions may be needed. These documents help your loved ones avoid confusion or conflict and give you control over how important matters are handled.

In this way, estate planning isn’t simply about the future — it’s also about having peace of mind today. When you prepare for potential incapacity or emergencies, you’re safeguarding your lifestyle, your preferences, and the people who may need to step in to help.

Myth #3: The best way to disinherit someone is to leave them $1

Many people once believed that giving a person a token amount — famously $1 — was the proper method of disinheritance. This strategy has not only fallen out of favor but can also create unnecessary complications. Mentioning someone in your will, even just to leave them a symbolic sum, may qualify them as an interested party. This could allow them to obtain sensitive details about your estate or give them more room to challenge your wishes.

Today’s recommended approach is much more straightforward: clearly state that you intend to exclude the individual. A direct statement of omission, written with proper legal language, makes your intentions unmistakable while reducing opportunities for disputes. This method also helps maintain privacy since it avoids drawing extra attention to the person you do not want included in your plan.

Bringing it all together: Why thoughtful estate planning matters

These myths illustrate a larger truth — estate planning is not a set-it-and-forget-it task. It is an evolving process that requires intentional decisions and periodic review. Drafting documents is only the beginning. Ensuring your trust is properly funded, keeping your directives up to date, and revisiting your choices as life changes all play a crucial role in making sure your plan works as intended.

Symbolic gestures, half-completed forms, or outdated strategies won’t provide the security most people hope for. By approaching estate planning with clarity and professional guidance, you can build a plan that truly reflects your wishes, minimizes stress for your loved ones, and protects what matters most — both now and in the future.