The Law Offices of John Pankau
7 Lies of Wills &
Trusts That Could
Cost You $500,000 or
More of Your Hard
Earned Money
The secret to legally keeping Uncle Sam Out of Your Pocket
By John Pankau
7 Lies of Wills & Trusts That Could Cost You $500,000 or More of Your Hard Earned Money
www.PankauLaw.com
You Earned It & You Deserve To Keep It
“You earned it and you deserve to keep it” is what I practically screamed to a small group who
wanted to discover how they could keep more of their money. Many wanted to know how they
could pass on money to their kids, grandkids, and great-grand kids.
Many were shocked at why someone would tell them they deserved to keep their own money.
You see many subconsciously believe they don’t deserve to keep their own hard earned money.
You deserve to keep as much of your money as you are legally entitled to.
The 7 lies of wills and trusts that I am going to share with you aren’t going to tell you to open up
bank accounts in foreign countries under assumed names or fancy corporations. This guide will
not teach you how to cheat on your taxes.
What I am going to reveal to you in this guide is lies that exist on the Internet and ones that
clients have asked me during our free consultations.
Right now I am only going to ask you to do one thing:
Whatever you have read about Wills & Trusts--whether it has been 1 sentence, 1 page,
or an entire book--I want you forget for the duration of this guide.
Of course you can’t forget what you have read on purpose however what I am going to share
with you will shock you. I can promise you that what will discover in the following pages may
come as a shock.
Questions might even come up as you read this guide and I would encourage you to write them
down and feel free to call me at 630-875-0500 to get the answers to them.
Before I get into the 7 lies of wills and trusts I want to share with you what I believe the goal of
wills and trusts is:
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7 Lies of Wills & Trusts That Could Cost You $500,000 or More of Your Hard Earned Money
www.PankauLaw.com
Transfer of Property and Assets to Heirs with Minimal Taxation
Notice the word minimal not zero taxation. When someone says you can avoid taxes entirely I
would recommend that you get up and run for the door. Don’t wait for anything else to come
out of their mouth just run like your hair was on fire (which I hope it’s not).
Lie #1 – “It doesn’t matter how you own the property it just matters that
you pay it all off and owe nothing when you die”
For many individuals their home is their biggest asset. They have worked for 20, 25, sometimes
30 years tirelessly to pay off their home.
It comes as a shock too many heirs when they watch 10’s of thousands of dollars disappear to
taxes. They watched their parents work so hard to pay it off only to watch Uncle Sam take more
than his fair share.
What is the right way to hold title on a property for minimal taxes?
Before I shed some light on the answer to this question allow me to share with you the most
common form of holding property is Joint Tenancy.
Without getting into ALL of the details joint tenancy can cause major challenges in transferring
ownership without tax challenges.
How should you hold title?
The short answer to the question is that “it depends”. In other words it depends on your
particular situation. Evaluation of how you are holding your property (all of your property) is
critical to keeping your hard earned money.
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7 Lies of Wills & Trusts That Could Cost You $500,000 or More of Your Hard Earned Money
www.PankauLaw.com
Lie #2 – “Just let the eldest child be the executor of the estate, they will
know what mom and dad wanted anyway.”
Many a family has squandered money on choosing “anyone” to be the executor of the will. On
paper this seems like one of the easiest tasks.
They are the person who makes sure that what is in the will gets carried out. So if mom or dad
wanted a property sold they can just start selling.
The majority of problems that arise from choosing an executor are the actions the executor
takes. Most executors are well meaning individuals who are just trying to do what the creator
of the will wanted. Issues arise because an executor is required by most states to have
knowledge of probate laws.
Many an executor has gotten themselves in trouble for trying to carry out the will too quickly.
They have sold stock too quickly, sold property too fast, used assets incorrectly, or even sold
something accidently below market value.
All of these can put the executor in legal trouble with the other heirs. The law is unforgiving
even when the executor is well intentioned.
When you have been chosen as an executor to a will this is not something you should
undertake lightly. The first step is to make sure that you understand all of your duties and what
could happen if you make a mistake.
Lie #3 – “A long drawn out will isn’t necessary. As long as there is a
simple power of attorney everything will be fine and work out.”
The phrase “power of attorney” is one of the most over used terms in the legal field today.
Many lawyers use this phrase trying to be helpful to their clients and reduce their cost.
On one legal website the search “power of attorney” turned up 19 different results. The same
phrase typed in Google revealed over 6.46 million references to the phrase.
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7 Lies of Wills & Trusts That Could Cost You $500,000 or More of Your Hard Earned Money
www.PankauLaw.com
What this means is you can’t just have a “power of attorney document”. To help allow me to
reveal a few of the biggest mistakes that are made when the term “power of attorney” comes
up so you can watch for these pitfalls.
Power of attorney usually refers to a general power of attorney. When someone is still alive this
may be acceptable (noticed I said “may” not always). In regards to wills and trusts a general
power of attorney could present heirs with unexpected challenges.
Additional questions that I recommend having the answers to when you hear the word “power
of attorney” are:
Will the power of attorney allow for decisions made in regards to healthcare?
Does this power of attorney allow us to get a HIPPA release?
What are the draw backs of this power of attorney that is being created?
Each power of attorney has different pros and cons and understanding them will keep you and
those that you love from being left high and dry.
Lie #4 – “As long as you put it in a “trust” your heirs will be fine”
Sometimes the phrase “put it in a trust” is said when someone asks a question on protecting
assets. There are over 27 different kinds of trusts that one can create.
Which of the 27 trusts should you put your assets in?
Trusts can be complex and deciding on one isn’t something I can just tell you to do in this guide.
What I can do is provide you with a tool to watch out for so you know what you are hearing.
Irrevocable vs. revocable trust. Each one has their pros and cons. A revocable trust is
actually a type of living trust where one can make changes during his or her lifetime.
Sometimes changes need to be made and other times they don’t. The important part is
to know why you need to make changes and what the ramifications are.
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7 Lies of Wills & Trusts That Could Cost You $500,000 or More of Your Hard Earned Money
www.PankauLaw.com
While not a separate lie I often hear that “once you set-up a trust it is done”. This may be bigger
than the lie of “just put it in the trust”.
Trusts must be updated simply because the laws change.
As an example my motivation for writing this guide was someone who had me review a trust
that hadn’t been updated because they were facing a tax bill.
This client was facing a $500,000 tax bill because the trust they had was not properly updated
to combat the changes in the tax law.
Lie #5 – “As long as a will is written your heirs are protected.”
For just a moment I want you to think of the court appointing someone to handle your estate.
Your careful planning of creating a will doesn’t get noticed.
The courts treat a lost will the same as if there is no will.
Many individuals put wills in extremely “safe” places. These places are so safe that heirs cannot
find them after someone passes. When an original will cannot be found the courts decide what
is best.
For just a moment think of a court appointed individual making decisions on how your estate
should be handled. They will decide everything and your best laid plans can go awry.
Copies of wills also may not be good enough. The courts want to have the original so they know
they are executing what is truly your intent.
Where ever your will is currently located ensuring that that is protected from being lost, stolen,
or damaged in any way.
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7 Lies of Wills & Trusts That Could Cost You $500,000 or More of Your Hard Earned Money
www.PankauLaw.com
Lie #6 – “You don’t need a will until after you are retired or feel like you
are going to die”
Predicting the future is difficult if not impossible to do. One of the biggest reasons why estates
are settled by the court system is someone passes without a will.
Wills are something that many “intend to get to” but never take the time to do.
While no one ever wants to make time to create a will you won’t be the one who suffers. The
ones you leave behind suffer.
I have seen many heirs in tears as assets are divided up in a manner that they know their
parents wouldn’t want simply because there was no will in place.
The perfect time to create a will is before you need it. Life changing events such as marriage,
children, grand children, or great grand children are a great reason to create or update a will.
When you take time to create a will you can rest assured that should something unforeseen
happen those that love and care for you will be able to carry out your wishes.
Lie #7 – “Just download a form from the Internet and you can create your
own will in 15 minutes.”
The internet is a wonderful resource.
You can buy everything from toilet paper to real estate. One of my favorite testimonials from
an Internet website that offered legal documents was from a lawyer. The testimonial spoke
about how great the website was because he was were a lawyer.
Websites that offer legal advice can be great if you already know what you are doing and you
just need a form. In other words when you just need a simple form, no significant amount of
money is involved, you don’t have any questions, and are 100% confident in what you are doing
downloading a form from the Internet is great.
99% of individuals need more than a form.
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7 Lies of Wills & Trusts That Could Cost You $500,000 or More of Your Hard Earned Money
www.PankauLaw.com
What they really need is someone to guide them through the process of creating a will where
their individual and unique questions are answered.
“Discover the Answers to ALL of Your Will & Trust
Questions in a 100% FREE Consultation”
Available only at: www.PankauLaw.com
This coupon entitles the owner to a 100% FREE
Consultation with John Pankau.
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