Elder Law covers a range of issues facing Seniors and their families, including Medical Assistance eligibility, Guardianships, and Filial Support.
Top Twelve Myths of Estates, Probate, and Elder Law
The following are twelve of the most prevalent myths I come across in my practice as an estates and elder law attorney. Far too often, I find clients have misguidedly relied upon these myths to their detriment. Do not rely upon what you read online, what your friend told you, or what you heard happened to someone else. I offer free initial consultations in the hopes that I will correct such misconceptions so that no one will make a significant mistake based upon inaccurate advice or information.
Myth #1 – I don’t need a Will, when I die my spouse gets everything.
Reality - Depending on how your assets are titled and who you leave behind, your spouse may only receive half of your estate. For a younger individual, this may mean your spouse splits your estate with your parents. For an older person, your spouse may have to split your estate with your children.
Myth #2 – My Will says how all of my property will be distributed.
Reality - Your Will only controls how your “probate assets” are distributed. Joint assets and assets with beneficiary designations (such as life insurance, IRAs, 401ks, and other retirement accounts) pass to the joint owner or designated beneficiary regardless of the terms of the Will.
Myth #3 – My children don’t have to worry about my debts. When I die, my debts die too.
Reality - Pennsylvania has “filial support” laws that allow hospitals and nursing homes to seek payment from an indigent parent’s children. These laws are being enforced with increasing frequency. Additionally, if you pass leaving other debts (such as credit card debt), your estate must pay these debts first, before your children will receive an inheritance.
Myth #4 – I don’t need a Financial Power of Attorney, my spouse / child can help me.
Reality - While a spouse or a child on a joint bank account may be able to help pay basic bills, they will be limited in their ability to sell real estate, apply for governmental benefits, or engage in other financial transactions. The alternative to a Financial Power of Attorney is a Guardianship, which can be contentious, humiliating, and easily cost a few thousand dollars.
Myth #5 – I don’t need an Advance Healthcare Directive, my children know what I want.
Reality - One of your children may know what you want. However, if you have multiple children, the others may be able to out-vote the one trying to follow your wishes. More importantly, if the time comes to remove you from a respirator, having your wishes in writing will give your children peace of mind and a clear conscious to carry out your desires.
Myth #6 – If I give my home to my children, they won’t have to pay taxes on it.
Reality - This is one of the myths I hear the most. In the best case, most likely scenario, your children will pay the same amount of inheritance taxes. However, in the worst case, they will pay many times more in capital gains taxes.
Myth #7 – When Dad goes into the nursing home, they will take everything.
Reality - Many options exist that will allow Dad to limit the financial burden associated with long-term care in a nursing facility. A Home Protection Trust can allow Dad to preserve his home (and other assets) from the huge nursing home bills. Caregiver contracts, the purchase of a life estate, strategic gifting, and other spend down techniques can allow Dad to maintain eligibility for Medical Assistance while protecting his assets from the high costs of long-term care.
Myth #8 – It’s too late to do anything, Mom is already in the nursing home.
Reality - NOT TRUE. Many options still exist that can be used to protect some of Mom’s assets. While early planning is best, various spend down strategies, transfer plans, annuities, and other techniques can be used to preserve as much of Mom’s estate as possible, while maintain her eligibility for Medical Assistance.
Myth #9 – I need a revocable living trust..
Reality - There are only a few reasons why a revocable living trust is worthwhile. Avoiding probate, protection from your creditors, and reducing inheritance taxes are not one of them.
Myth #10 – My children won’t fight over my estate.
Reality - Death often brings out the worst in people. Fights between siblings happen more often than you would like to think. A family can easily splinter with the loss of its matriarch or patriarch. Take control and address potential issues while you are still alive.
Myth #11 – I wasn’t wounded, so I am not entitled to any VA benefits.
Reality - Even if you (or your spouse) do not have a service related disability, you still may be eligible for various VA benefits, such as the VA Pension (with Aid & Attendance) benefits that can provide thousands of dollars a month. If you were told you don’t qualify for Pension benefits because you have too many assets, there are options available for you as well.
Myth #12 – Estate Planning is only for the wealthy.
Reality - It is those with the least to lose that can afford to lose the least. Schedule a free initial consultation today to learn how basic estate planning can benefit your family.
Michael J. Girardi
Estate Administration is a process that involves a wide range of duties on behalf of the Executor or Administrator. These responsibilities include collecting, valuing, and protecting the estate’s assets, making payments to creditors and receiving collections from debtors, the payment of various taxes, and the distribution of the assets to the heirs and beneficiaries of the estate.
To learn more about Estate Administration, check out the resources below, or contact us to schedule a free consultation.