Assisting Clients
Throughout Alaska
907.522.2272
Serving Alaskans
Share

Foley, Foley & Pearson News

Wednesday, June 13, 2012

Common Estate Planning Myths

Estate planning is a powerful tool that among other things, enables you to direct exactly how your assets will be handled upon your death or disability. A well-crafted estate plan will ensure you and your family avoid the hassles of guardianship, conservatorship, probate or unpleasant estate tax surprises. Unfortunately, many individuals have fallen victim to several persistent myths and misconceptions about estate planning and what happens if you die or become incapacitated.

Some of these misconceptions about living trusts and wills cause people to postpone their estate planning – often until it is too late.

Myth: I’m not rich so I don’t need estate planning.
Fact: Estate planning is not just for the wealthy, and provides many benefits regardless of your income or assets. For example, a good estate plan includes provisions for caring for a minor or disabled child, caring for a surviving spouse, caring for pets, transferring ownership of property or business interests according to your wishes, tax savings, and probate avoidance.

Myth: I’m too young to create an estate plan.
Fact: None of us know exactly what the future holds. Even if you have no assets and no family to support, you should have a power of attorney and health care directive in place, in case you ever become disabled or incapacitated.

Myth: Owning property in joint tenancy is an easier, more affordable way to avoid probate than placing it in a revocable living trust.
Fact: In Alaska, only a husband and wife can jointly own property with a right of survivorship.  Holding title to real property with someone other than your spouse results in a tenancy in common.  Tenants in common have no right of survivorship, meaning that if one tenant in common dies, that tenant's interest in the property will be part of his or her probate estate and pass to their heirs and devisees either by will or intestate succession. 

Myth: Keeping property out of probate saves money on federal estate taxes.
Fact: Probate, and probate avoidance, are governed by state law and address how property passes upon your death; they have nothing to do with federal estate taxes, which are set forth in the Internal Revenue Code. Estate planning can reduce estate taxes, but that has nothing to do with a discussion regarding probate avoidance.

Myth: With a living trust, a surviving spouse need not take any action after the other spouse’s death.
Fact: Failure to adhere to the proper legal formalities following a death could result in significant administrative and tax implications. While a properly drafted and funded living trust will avoid probate, there are still some tasks that have to be performed such as filing documents, sending notices and transferring assets.  

Which myths have you heard? Which ones have you believed? 

 

 


Archived Posts

2019
2018
2017
2016
2015
2014
2013
2012



© 2019 Foley, Foley & Pearson, P.C. | Disclaimer
4300 B Street, Suite 400, Anchorage, AK 99503
| Phone: 907-522-2272

About | Resources | Workshops | Services | Generations

Attorney Website Platform by
Zola Creative