will only provide benefits if you are disabled at work, so can-
not be relied upon to cover this possible need.
Myth #9: My car is old, so I do it does not make financial sense to
have collision coverage on my vehicle. Truth: An old vehicle that
is paid for can be one of your most valuable assets. If you
drop the collision coverage and have an accident where the
car collides with anything (another car, curb) you would not
have coverage. If the accident is not your fault, you are relying on the other person’s coverage. If they do not have coverage or have low limits of coverage, you could be left paying
for the damages.
Myth #10: The stock market has been declining so it is a bad time
to invest. Truth: There are several reasons why this is a myth.
First, investing in the stock market should be a long-term investment for most of us, so you should be able to wait out the
high and low points. Secondly, you should buy at a low price
and sell at a high price. If the market is down or declining
(known as a bear market) that is a good time to invest because you are investing at a low point.
Myth #11: I am young, so I do not need a will or any estate plan-
ning documents (living will, power of attorney for healthcare and fi-
nances). Truth: You are less likely to die at a young age, but
there are no guarantees that you will live to an old age. With-
out a will, you are dying intestate which means that a court
will decide who gets your assets and will divide them among
your next of kin based on state laws. What is even more im-
portant for a young person are the living will and power of
attorney for healthcare and financial needs. You need a liv-
ing will to let your family know your wishes regarding end-
of-life medical care. The power of attorney empowers some-
one to make these decisions on your behalf, including paying
your bills if you are unable to do so.
Myth #12: My heirs are responsible for my debts. Truth: This is
only true for debts acquired jointly such as a mortgage or
auto loan. If you are the only person listed on the auto loan,
the mortgage or credit card application, then nobody else is
responsible for these debts. Any creditors are entitled to be
paid first from your estate assets, especially secured creditors (auto loans and mortgages are secured debt, credit card
debt is not). Your heirs inherit the estate after creditors have
been paid out of the estate assets. One important caveat to
remember—if you co-signed on a loan for anyone, including
education debt, you will be responsible for that obligation if
they die. However, federal education debt dies with you. ✈
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dr. Sherry J. Parshley (WAI #4954) is founder of Sierra Papa
Aviation Consulting LLC, which provides accounting, finance
and tax support for aviation businesses and attorneys. She
is a commercial pilot, certified flight instructor and co-builder of an RV- 8 aircraft. She welcomes questions and
suggestions for future columns and can be reached at sherry@
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