Take a look at some of the most common misconceptions that are often heard by us, at The Estate Planning Group:
Misconception #1: A Power of Attorney can be used after death. No. Upon a person’s passing, Powers of Attorney lose any and all authority possessed during a person’s life. Whether a Power of Attorney for Health Care or a Power of Attorney for Finances, both documents, expires upon death. Neither document allows for anything to be done after death. Such decisions remain strictly in the hands of the Personal Representative under a Will or a Trustee under a Trust.
Misconception #2: A Will avoids probate. No. A Will is the primary tool of the probate system. Your Will is like a letter to the Court telling the Court how you want your property distributed. The Court gets to interpret your Will. After your death your representative must prove to the Court that all your property is collected and appraised, and all your bills and taxes are paid, before your property can be distributed to your heirs.
Misconception #3: Your Will and your assets remain private. No. Because probate is a public legal proceeding, everything that occurs with your estate will become public record. This means that anyone – including nosy neighbors and salespeople – can go to Court to find out the balance in your accounts, the value of your stocks and other assets, and who you left your property to. 
Misconception #4: Estranged family members do not need to be notified of a probate if the Will excludes them from an inheritance. No. All heirs must be notified of the probate even if they are excluded from the Will. It is safer to handle an estate with potentially disgruntled heirs through a Living Trust.
Misconception #5: A Testamentary Trust avoids probate. No. A Testamentary Trust is a Trust created at your death by direction of your Will for a specific purpose. Your Will and estate still must go through the probate process.
Misconception #6: Minimizing Estate Taxes should be a primary concern. Probably No. Currently, the exemption level is over $5,450,000 per person. This means prior to having to pay any estate taxes, you need to have assets over that exemption level. While there may be other taxes worth worrying about, namely income taxes on pre-tax retirement accounts, estate taxes often are not of paramount importance.
Misconception #7: Revocable Living Trusts are only for large estates. No. Revocable Living Trusts are for anyone who wants to avoid costly conservatorship and probate proceedings. Those with small estates, and especially their heirs, can benefit from a Revocable Living Trust.
Misconception #8: A Revocable Living Trust must have a separate tax return. No. If you are a trustee or co-trustee of your Revocable Living Trust, it does not need a tax return of its own. Your personal tax return is sufficient for the IRS.
Misconception #9: There are no costs associated with administering a Trust at the death of the original settlor of the Trust. Not always true. Depending on what assistance and professional help a Trustee relies on, administering a Trust, distributing the assets, and terminating the Trust can result in fees and costs. Many trustees hire attorneys and accountants, but these costs are substantially less than the costs of probate. Typically, these costs are paid by the Trust.
Misconception #10: You have to amend a Revocable Living Trust when you buy or sell your assets. No. Your Trust does not have to be changed when you buy or sell assets. When you buy a new asset, such as real property, a car, or open a new bank account, you simply take title as trustee of your Trust. If you sell an asset, you sell it as trustee of your Trust.
If you’d like to ensure that you maximize the resources available to your loved ones and keep your family out of Court and out of conflict, schedule a Family Life and Legacy Planning Session.™ We can review your existing plan and help you make adjustments that will help you achieve your goals.
This article is a service of The Estate Planning Group and Davidson Law Office, LLP, your Life & Legacy Planning Lawyers, who believe in developing trusting relationships with families for life. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.