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Home » Estate Planning » Don’t Buy Into These Estate Planning Myths

Don’t Buy Into These Estate Planning Myths

August 21, 2021 by John Potter

estate planningThere are some common misconceptions that people pass around about aspects of the estate planning process. In this post, we are going to look at a handful of them to give you some insight that may save your family a lot of time, money, and stress.

Estate planning is not necessary unless you are very wealthy.

The idea that estate planning is only for the rich is completely false. Yes, high net worth individuals have to take steps to preserve their resources, and the estate tax can be a source of concern.

That tax is applicable on the portion of an estate that exceeds the exclusion amount, $11.7 million this year. In 2026, it is going down to $5.49 million when a provision that is contained in the Tax Cuts and Jobs Act expires (unless Congress changes the law before then).

Even if your estate is not going to be exposed to this tax, though, you should work with an attorney to put a solid estate plan in place. There are many different approaches you can take, and your plan should be custom crafted to ideally suit your needs.

A will is all you need.

Everyone has heard of the simple will, and it is the most commonly used estate planning device. If you use a will to state your final wishes, you have to accept its limitations.

Unless you include a testamentary trust, which is a trust contained within a will, the beneficiaries will receive lump sum inheritances. This can be a source of concern if you have a poor money manager on your inheritance list.

You also have to be concerned about government benefit eligibility. If someone relying on need-based government benefits receives a significant inheritance, the money could cause a loss of eligibility.

These are a couple considerations, and there are others, including probate concerns, so you should learn about your options so you can make fully informed decisions.

You don’t need an estate plan until you are in your 70s.

This is a very dangerous perspective. As soon as you are a self-supporting adult, you should have an estate plan in place to address your final expenses, the transfer of your property, and your health care choices.

A living will is an advance directive that states your life support choices, and you can include organ and tissue donation preferences.

You should add a durable power of attorney for health care naming someone to make medical decisions on your behalf. A HIPAA release should be included as well to give the health care representative the right to access your medical records.

If you are married, you have a responsibility to someone else, and estate planning becomes that much more important. And of course, when children come along, estate planning becomes an absolute must.

Medicare will cover all my medical expenses when I am a senior citizen.

Medicare is a solid source of health insurance, but it does not cover everything. There are copayments, deductibles, and premiums that have to come out of your pocket, and the program only pays 80 percent of treatments that are provided by doctors and other health care providers, which is one reason seniors obtain supplemental policies.

In addition to these expenses that you have to pick up yourself, there is a gaping hole in the coverage. Medicare does not pay for a stay in a nursing home, and it does not cover in-home custodial care.

Most seniors will need some type of paid living assistance eventually so the inheritances that you want to leave to your loved ones could be consumed by long-term care costs.

Medicaid will cover living assistance if you can gain eligibility, and we can explain all the details.

We Are Here to Help!

If you are ready to work with a Charlotte, North Carolina estate planning lawyer to put a plan in place, our doors are open. You can set up a consultation appointment in our Charlotte or Huntersville, North Carolina office if you call us at 704-944-3245.

The number for our Ashland, Kentucky location is 606- 324-5516, and the number for our Florence, Kentucky location is 859-372-6655.  Or you can use our contact form if you would rather send us a message.

  • Author
  • Recent Posts
John Potter
Latest posts by John Potter (see all)
  • What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
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Filed Under: Estate Planning Tagged With: advance directives for health care, Trusts, Wills

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