Estate planning is a process that ensures your assets are distributed according to your wishes after you pass away. However, misconceptions about estate planning can lead to costly mistakes.
In this blog, we’ll debunk several common estate planning myths to help you make informed decisions.
DIY Estate Planning Is Easy and Effective
The internet is full of ads promoting do-it-yourself estate planning tools, including wills and trusts. These services promise simplicity, effectiveness, and affordability.
However, while DIY estate planning might seem like a quick and cost-effective solution, it comes with significant risks.
Estate planning is a complex process with long-term financial implications for your family. It involves more than just filling out forms – it’s about making sure your legacy is passed on in a way that reflects your wishes and protects your loved ones.
Mistakes made in a DIY estate plan can lead to legal challenges, unintended tax consequences, and family disputes. There is no substitute for the expertise and guidance of an estate planning attorney.
Inheritances Are Always Tax-Free
Many people believe that inheritances are not subject to taxes, and while there is truth to this, it’s not a blanket rule. For example, a direct inheritance from a will is not considered taxable income, and life insurance proceeds are generally tax-free.
However, there are exceptions. Distributions from a traditional individual retirement account (IRA) are subject to income tax for the beneficiary, while distributions from a Roth IRA are tax-free.
Additionally, if you inherit assets that generate income, such as rental property or investments, you may have to pay taxes on that income.
At the federal level, there is an estate tax, but it only applies to estates that exceed the federal exclusion. In 2025, the exclusion is $13.99 million. Most estates fall below this threshold, so the majority of people will not have to pay federal estate taxes.
Some states impose their own estate taxes, and Connecticut, where we practice, is one of them. The good news is that the exclusion is the same as the federal exclusion, so there is a pretty sizable cushion there.
Trusts Are Only for the Wealthy
There’s a common misconception that trusts are only useful for the wealthy, particularly for those looking to minimize estate taxes. While it’s true that irrevocable trusts can be used to reduce estate tax liability, trusts serve many other purposes.
For instance, revocable living trusts are a popular tool for avoiding probate. These trusts allow you to maintain control over your assets while you’re alive.
Additionally, special needs trusts can protect assets for individuals with disabilities without jeopardizing their eligibility for government benefits.
Trusts can also be useful for protecting minor children, ensuring that their inheritance is managed responsibly until they reach adulthood. Before dismissing the idea of a trust, it’s important to discuss your goals with an estate planning attorney.
The State Will Handle Everything If You Die Without a Plan
It’s a common belief that if you die without an estate plan, the state will step in and take care of everything. While the state does have a process for distributing your assets if you die intestate (without a will), it may not align with your wishes.
If you die intestate, the probate court will appoint a personal representative to administer your estate. This person will pay off any debts and distribute the remaining assets according to the intestate succession laws.
These laws dictate how assets are distributed among surviving relatives, but they may not reflect your preferences. People you would have included in your estate plan could be left out, or the distribution percentages might differ from what you would have wanted.
Relying on the state’s default rules can lead to unintended outcomes and family disputes. Creating a personalized estate plan ensures that your assets are distributed according to your wishes, giving you peace of mind.
Schedule a Consultation Today!
Don’t let these myths lead you astray. When you work with us, we will learn about your situation and make personalized recommendations. Ultimately, you will emerge with a tailor-made plan that ideally suits your needs.
We have an estate planning office in Westport, CT, and another one in Glastonbury. You can call us at 860-548-1000 to set up a consultation at either location, and you can use our contact form to send us a message.
If you would like to take your understanding to another level before putting a plan in place, attend one of our monthly seminars. They are offered on a complimentary basis, and you can visit our Seminar Page to see the dates.
- What Is a Pour-Over Will and Why Do I Need One? - August 13, 2026
- Family Loans: Should They be Addressed in Your Estate Plan? - August 4, 2026
- Can You Refuse an Inheritance? - July 2, 2026
Can I Access Income Earned By Assets in a Medicaid Trust?
( By appointment only )