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Estate and elder law mythbuster

On Behalf of | Aug 10, 2023 | Estate Planning, Probate

Receiving long term care services means you’ll have to spend down all your money:

FALSE – with the right planning, we can almost always save money for a long term care or disabled patient. Also, it’s never too late to try, even if you’re already on the doorstep or in a long term care facility. With basic or sophisticated lawful strategies that work, you don’t have to spend it all, though part that you keep may be in the hands of your family or others for you.

It’s easy for a beneficiary, or for someone left out of a Will, to challenge or overturn a Will:

FALSE – Most Wills and legal documents, especially when made  with  an attorney, are done properly, ethically and legitimately. However, even when there are grounds to challenge a Will, such as undue influence, lack of testamentary capacity, forgery, duress, mistake, et cetera, there are hurdles to overcome for the challenger to prevail in court. First, they are usually subject to an increased burden of proof or standard tor persuasion, called “by clear and convincing evidence,” which can be difficult to meet  (and it’s assessed pretty subjectively by a Judge)., Another barrier is that, except in the strongest of cases, a challenger has to pay his attorney up front, win or lose, rather than only on a contingent fee basis.

If you die without a Will your estate gets forfeit to the State of Pennsylvania:

 FALSE – Under Pennsylvania’s law of inheritance, when you don’t leave a Will your “heirs” inherit from you – essentially, your next of kin, in various proportions.

Your Medicare or health care insurance will pay for you to be in a nursing home or in long-term care if needed:

FALSE – except for the initial SHORT term care, Medicare and most health insurances don’t pay for nursing home assisted living or long term care. That’s when patients and their families may need Medicaid, VA benefits AND an elder law attorney’s proactive, affirmative planning strategies to first make sure care is paid for, and to protect and save as much as possible at the same time.

You don’t need a POA if you’re married:

FALSE. If your spouse is disabled and cannot act for themselves, just because you’re married does NOT mean that you can sign their name for them, for many kinds of financial transactions (e.g. with securities or retirement accounts unless you have a financial Power Of Attorney giving you permission to act for them. Instead, you have to go to court and bring proceedings before a Judge to be officially appointed as a legal Guardian. As you can imagine, it takes longer, costs more and is a lot less flexible when the Judge and the Court are in charge.

You also need a POA for Health Care and Living Will to make medical decisions for your spouse or family:

FALSE. This one’s wrong in the opposite way! Under PA law, even without a Health Care POA appointing you as a Health Care Agent, your next of kin can act as what’s instead called your Health Care Representative. But if there’s disagreement in the family about decisions, a hospital administration may still require legal / court intervention to sort it out.

Joint, Transfer-on-Death or In-Trust-For assets avoid PA Inheritance tax and only assets passing under a Will are subject to Pennsylvania inheritance tax:

FALSE – TOD and In Trust For accounts are fully taxed for Pennsylvania inheritance tax. For joint accounts made joint more than a year before death, only the fractional portion of the person who died is subject to tax (e.g. half of an account with two depositors). The tax rate varies from 0% for spouses and charities, to 4 1/2 percent for descendants and their spouses, 12% for siblings, and 15% for others.

A Will has to be notarized:

FALSE – you can sign a valid will without notarization – but using an attorney to do it right includes proper signing, witnessing and Notarization. (A Financial POA in PA DOES REQUIRE proper execution to be effective, though, including Notarization.)

Trusts are only for rich people:

FALSE – the word “trust” describes a very wide variety of usages, but many middle class folks can benefit from utilizing a trust, such as to direct and control inheritances later while avoiding extra probate steps, safeguarding benefits for a special needs family member, or protecting your own assets against the cost of long term care.

If you give someone POA they can do whatever they want:

FALSE – your Agent under a Financial POA has a legal “fiduciary duty” to act properly for you. If they don’t, you can easily revoke it if you’re still capable, AND the courts in PA will (almost) always review and supervise someone else handling your assets or monetary affairs.

If you put assets into a trust you lose all control:

FALSE –  Most of my clients who create trusts are usually the Trustees of their own trusts, in charge of their own trust  – and most often the beneficiaries as well, entitled to use, withdraw, spend and enjoy their own money from their trust.