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Senior Legal Hotline Providing free legal advice and counsel to seniors for 20 years
Senior Legal Fact Sheet: Estate Planning Myths and Traps
Planning for the future is very important for anyone, and estate planning, in particular, is extremely
important for seniors. As a result of the need for assistance in this area, numerous scam artists have
cropped up, trying to con seniors into purchasing products that may be inappropriate for them, such
as unnecessary trusts, annuities, investments, or home equity loans.
Make sure you are prepared by reading about some of the most common myths and traps below:
Living Trusts: Not for everyone
The main reason most people draft a living trust is so that their heirs don’t have to go through probate
court to complete the process of inheriting property. If a Californian’s estate, at the time of his/her
death, is worth more than $100,000, the administration of the estate (the process by which property
from the estate is distributed to heirs according to a will, or if there is no will, according to state law) is
overseen by a judge, and the process can take several months.
If you own real property (your home for example) worth more than $100,000, a living trust may make
Probate can be avoided easily for many other types of property, including bank accounts, most
investments and most personal property, without a trust and without losing any control of the
property during your lifetime.
Except for some very large estates, a living trust will not avoid taxes.
Property in a living trust is not protected from Medi-Cal estate recovery.
Beware of trust mills that try hard to entice you into buying trusts. Even if the prices seem low,
their main goal may be to learn about your assets and sell you other products you truly don’t
need, like annuities, insurance policies, equity loans or dubious investments.
If you decide to set up a living trust, make sure you do so through an ethical attorney,
preferably one who practices estate planning law. But keep in mind that a trust may cost you
more than the probate process would cost your heirs.
Administering a trust correctly is complicated; many trusts have turned out to be useless
because the buyers didn’t know what to do with them.
This handout is intended to provide accurate, general information regarding legal rights relating to estate planning in
California. Because laws and legal procedures are subject to frequent change and differing interpretations, the Senior
Legal Hotline cannot ensure the information in this fact sheet is current nor be responsible for any use to which it is put.
This is not legal advice. Do not rely on this information without consulting an attorney or the appropriate agency about
your rights in your particular situation. This information is current as of November 30, 2011.
Having a living trust ensures that your estate won’t have to go through probate, but on the
other hand, also means that it could be easier for some heirs of your property to cheat others
without a judge overseeing the property distribution.
Adding someone to title has consequences
Adding someone’s name to the title of your home is an easy way to pass it to that person after your
death, but there are some consequences to consider:
The person whom you are adding to title has equal rights as yours to the house, even if you
paid every dime for it. He or she could even decide to move in with you, and it would be their
right, whether you like it or not.
You can’t change your mind about sharing ownership unless the other person agrees to
voluntarily remove themselves from title.
You also can’t change your mind by leaving the home to someone else in your will or trust. At
most, you could only give your interest in the house to someone else. But as we all know, you
can’t sell half a house.
If your co-owner is sued and a lien is placed against the home, this could interfere with your
A lien could keep you from qualifying for some valuable discounts, tax breaks, or loans
available to low-income homeowners. It could also cause higher property taxes for your co-
Don’t let nursing home fears cause you to make hasty decisions
No one wants to spend the end of their life in a nursing home, but for some of us it will be a necessity.
Some thought and planning is a good idea, but don’t let anyone mislead or scare you into one of
many common mistakes:
Most people spend very little or no time in nursing homes at the end of life, so be careful not to
make hasty decisions when you’re healthy based on the question: “What if?”
Don’t be pressured into giving away property to qualify for Medi-Cal without expert advice.
There’s a lot you can keep, you may actually disqualify yourself, and remember: once you give
it away, it’s no longer yours.
While it’s true that the state will want to be paid back after your death for Medi-Cal benefits you
received, there are many ways the recovery process can be delayed.
Laws could easily change in the future. If you plan too far ahead, what seems like a smart
move today may prove unnecessary or unwise in the years to come.
If you are over 60 in Sacramento County, you can get free advice by phone from the Senior Legal Hotline regarding this
or any other legal issue. Call (916) 551-2140 or (800) 222-1753 toll-free, Mon.-Fri. 9 to 12 and 1 to 4. You can also
submit your question by e-mail from our web site, www.slh.lsnc.net. The Senior Legal Hotline is a project of Legal
Services of Northern California, a nonprofit public service agency, supported by the Administration on Aging (U.S. Dept.
of Health and Human Services), Area 4 Agency on Aging, grants and voluntary donations.