Estate Planning Myths

Many people have wrong ideas about estate planning. Sometimes these ideas keep them from taking the proper steps to protect their families and assets.

Signing document at office

Signing document at office

An article on lists some myths about estate planning.

They include:

  • Since I don’t have an estate, there is nothing to plan. Actually, estate planning has to do with many things, including death, disability and divorce.
  • People have to get married to protect ourselves. Marriage makes estate planning easier, but there are estate plans for unmarried couples too.
  • Wills and powers of attorney are not needed if married. The truth is that marriage does not automatically confer complete decision-making powers on either spouse. Power of attorney is essential if either becomes incapacitated.
  • I must leave money to relatives. No, you do not have to.

These are just a few. The story lists several more.



Get Estate Plan Out If Going On A Trip

estate planning

estate planning

If you are heading out on summer vacation, you may want to pull your estate plan out of its drawer.

A column on describes what the author did when he and his wife were taking a trip without their kids. He made a long list of things that had to be done by the kids each day while the parents were away. Things such as feeding the dog.

Then, he took the estate plan out of its drawer. He showed it to his 16-year-old son and explained where it would be and what it was. He also told the boy his attorney’s name.

The boy was a little shaken, he said, but it was something that had to be done.

The message: you may have a great estate plan, but it is of no use if it cannot be found.

He also reminds people that they don’t have to wait for a trip to explain the details of the family’s estate plan to the kids.

Simple advice, but important.



Preparing For Your First Estate Planning Meeting

estate planning

estate planning

Estate planning may sound like a daunting task, but the process itself can be easier than you might imagine, particularly if you go in to the first meeting well prepared.

When meeting with your attorney, he or she will guide you through the various choices you will be asked to make, so that you end up with a set of documents that reflect your intentions, according to a story on

Here are seven things you should do to prepare:

  • Put together a list of assets and liabilities.
  • Determine if there are any personal items you want to leave to a particular person.
  • Consider who has the skill and willingness to be your representative.
  • Learn about trusts for your children and grandchildren.
  • Start to consider who might be trustees.
  • Decide who should make medical choices for you.
  •  Determine who should take care of your financial affairs if you cannot.



Lend to Family for Estate Planning?



Lending money to a family member is a simple but effective estate planning method.

So says an article on, which points out that the IRS often scrutinizes such transactions to make sure they are not gifts.

For that reason, it says, it is important to treat the loan just like an arm’s-length transaction between unrelated parties.

That means charging an interest rate at or higher than the applicable federal rate, executing a promissory note and taking steps to collect payments.

The move allows high-net worth parents to move assets out of their estate.



Why You Should Update Your Estate Plan Today

Estate planning documents in a leather briefcase - vertical

Estate planning documents in a leather briefcase – vertical

Only about half of Americans ages 55-64 even have a will. Fewer have an estate plan.

Even if you have an estate plan, however, it doesn’t mean your work is over, according to a story in Forbes.

The chances are your personal and financial situation will change as time goes on. You have to periodically review your estate to make sure it reflects current goals and needs.

These life changes can affect your plan:

  • Marriage
  • Divorce
  • You have or adopt a child
  • You get injured
  • Your goals change
  • You inherit
  • You buy or sell a business
  •  You move to another state



Health Care Choices for Elderly, Disabled

Close up view of a medicare card.

Close up view of a medicare card.

There are a number of options for health insurance for the elderly and disabled.

A story on outlines the various choices.

Medicare is available for those over 65 or who have been disabled for two years. There are a few options including traditional Medicare or Medicare Advantage. With traditional Medicare, most also purchase a supplemental plan as traditional Medicare pays only 80 percent of costs of health care.

Private insurance may cover more than Medicare in some cases, but is likely to be very expensive unless obtained through a job.

Coverage may also be available under the Affordable Care Act, for those ineligible for Medicare because of age. The premiums vary and depend on income, but most plans have high deductibles. However, those with preexisting conditions who don’t qualify for Medicare may find ACA, also known as Obamacare, their only option.

Medicaid is the insurance program of last resort for the poor.

Your elder care attorney can help you sort through the confusion.

Keeping Your Estate Plan Up To Date

Last will & testament

Last will & testament

Many folks wait until the last minute to update documents such as their wills.

A story on says that when you update your documents you should keep in mind not only the property and assets that are to be distributed, but also the people involved.

Carefully think about beneficiaries as well as people to whom you have entrusted responsibilities such as executing your will, serving as a trustee, power of attorney and guardian of your children.

The article lists the following events and circumstances that may force changes in your will or estate planning documents:

  • marriage
  • divorce
  • new child
  • illness
  • death of a family member

The story also suggests these are good reasons to do your estate plan this year:

  • savings on probate fees
  • naming a guardian for your children
  • reducing future taxes
  • helping charities you like


Move into Mom’s Retirement Home?

Mother and daughter

Mother and daughter

It seems like a crazy idea, but it is yet another consequence of lengthening life spans: maybe you should move into the retirement home with mom.

The number of adult children taking care of parents in their 80s and 90s is rising, and they are likely to be in their 60s and 70s themselves. They may be fed up with  housekeeping and home maintenance. And many spend many hours each week caring for parents.

Now, some are getting their own rooms in the retirement communities where their parents are living, says a story in the New York Times.

There are some 2,000 continuing care retirement communities — in which residents can go from independent living to assisted living to a nursing home over time — in the United States.

Not many adult children have actually moved into their parents’ communities so far, but more are expected to do so, the story says.

The idea is that the children can be closer to their parents but still have their own units. And as they age, they can move from the independent living section to the assisted living section if needed.

But the idea can be expensive, as most of these communities require a move-in fee on top of the monthly rent. The move-in fees can approach $100,000 in some places.

For some adult children, however, the convenience beats the costs.


Avoiding Tax and Estate Planning Time Bomb

While going over their finances for the new year, many well-intentioned parents may unknowingly plant a tax bomb for their children in their estate plan.

time bomb

time bomb

A story on says the tax levied on the sale of an asset can vary drastically depending on how the asset became the property of the heir.

Parents may deed a residence to a child while they are alive to protect it from long-term care costs or to avoid probate.

Because the child did not pay the parents the fair market value, it means the parents have made it a gift. The parents may have paid $50,000 for the home but it is worth $200,000. So the heirs must pay tax on $150,000 when they sell it. If it is worth more than $200,000, they will have to pay more tax.

The parents could have made use of a revocable trust to own the home. Then it would be passed on at death and the child would owe no tax as long as the property was sold for what it was worth on the date of death.



Estate Planning’s Importance

Estate planning

Estate planning

Estate planning is an uncomfortable task. But the decisions you make in drawing up your estate plan are actually acts of love and kindness to the people we trust with our affairs. But such acts of love also require courage, according to an article on

The most important part of estate planning involves the preparation of three documents expressing your wishes under different potential circumstances, the story says.

These involve decisions concerning medical treatment, legal and financial matters and decisions about your “stuff” after you are gone. Two involve matters that may occur while you are still alive — power of attorney and advance medical directive. The other deals with your will.

Either we address these matters or we leave chaos for our loved ones. You can do nothing, you can prepare the right documents and leave them in a drawer to be found after your death or you can think about your loved ones and what they will face when you are gone. In the last scenario, you revisit those documents regularly and make sure they are up to date.