Tag Archive for: estate planning

Eight Myths About Estate Planning

One of the Most Important Things Every Family Should Have…

As your wealth increases or your family expands, its so important to have an estate plan also known as a living trust that not only reduces your tax liability as life events occur but also dictates what is to occur when a life event happens.  For more info on estate plans, please see below or contact me for a referral in your area or based on what you are looking to do.


All the Best,

Rob McCarthy

Senior Mortgage Advisor


408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 6020 Hellyer Ave #150, San Jose, CA 95138

CA DRE #01165697  NMLS #121019


Eight Myths About Estate Planning

Somita Basu – Partner-Norton Basu LLP 

www.nortonbasu.com 408.850.7250 sbasu@nortonbasu.com

Myth 1: Everyone knows they need an estate plan.

This may seem like common sense, but as we know, common sense isn’t so common. The
majority of all Americans will die without an estate plan of any kind in place. Many people don’t
want to think about their eventual death or leaving their loved ones behind. But less than half
of all Americans have an updated estate plan that accurately reflects their wishes. The lack of
an updated estate plan results in the inefficient transfer of assets and incurs legal costs, trauma
for the beneficiaries, and expensive delays.

Myth 2: I don’t have an estate!

The word ‘estate’ can conjure up visions of castles, mansions, and the American version of
Downton Abbey. But in the context of estate planning, your ‘estate’ consists of everything you
won, no matter how little or how much. Anything you own in your name as an individual (or
jointly with a spouse or partner) is part of your estate. So, yes, you do have an estate. The
question is who decides what happens to your estate? You or the state of California?

Myth 3: I only need to worry about who gets my house.

Given Bay Area real estate prices, it’s natural to focus on what will happen to your house when
you die. Which child should get the house? Who should be able to live in it? Should rent be
paid? But you need to worry about more than just your house or rental properties. You also
have to consider your bank accounts, investment accounts, and even sentimental pieces of
property – maybe a book passed down for generations, wedding jewelry, or even photographs.

Myth 4: I’m not old enough to need an estate plan.

As soon as you turned 18, you needed an estate plan. At that age, an Advanced Health Care
Directive and Power of Attorney should be completed. When you become a legal adult, your
parents no longer have automatic access to your medical information or your assets. They will
need validly executed and notarized legal documents to help you should the need arise.
Remember, the components of an estate plan will vary with each individual’s need. It’s never a
one-size-fits-all option.

Myth 5: A will and a trust are similar.

A will and trust are only similar in that they both direct the disposition of your assets after your
death. But a will MUST go through the probate process in California while a properly funded
trust avoids court supervision in the vast majority of cases.

Myth 6: My will is a private document.

A will is a private document while you’re alive. But once you die, the original Will must be
lodged with the probate court. This Will then becomes a public document. Anyone can access
this document and your beneficiaries can definitely expect multiple calls from realtors,
investigators, and others. A Trust by comparison is a private document available to only your
beneficiaries and direct relatives. The only time a Trust becomes public is if litigation is

Myth 7: My agent can use my Power of Attorney after I die.

So many people seem to believe the Power of Attorney document allows access to their bank
accounts even after they die. This is simply not true. The agent acting under your Power of
Attorney only has access to your bank accounts and financial information while you are alive.
Once you pass away, anyone who requires access to your accounts will need court approval or
must be acting as Trustee of your trust. Either way, legal documentation will be required.

Myth 8: I can do my estate plan online with no problem.

Online estate planning packages have serious deficiencies. The legal language is faulty and
multiple legal issues are not addressed properly. But those are technical issues. The question is,
do you want your assets to pass to your beneficiaries as smoothly as possible or do you want a
one-size-fits-all option you can complete online without the advice of an experienced attorney?
Ask yourself, if you found a lump in your lymph node, would you Google the treatment or go to
a specialist and get tested and follow a prescribed treatment plan? Don’t leave something as
important as your legacy to an algorithm. Talk to an experienced estate planning attorney.

What Your Financial Planner May Not Be Telling You

Financial Planning can be a complicated equation with several moving parts that are constantly changing.  I recently heard that, a house with a crumbling foundation is worthless.  A house, like a financial plan, must have a solid foundation or eventually it can be weakened or even worthless!

This made me wonder why I rarely hear about insurance products as a foundational tool for a properly designed financial plan.  Insurance to some may seem expensive, yet what’s the true cost of NOT having insurance?   I have heard the term “Self-Insuring” or handling the potential risk on your own, seems to be a risky approach to protecting one’s current estate, future retirement lifestyle and legacy for their loved one’s.

We recently learned that there are three primary risks in retirement that jeopardize a retiree of achieving their dream retirement: (1) Market Volatility Risk; (2) Tax Risk; and (3) Longevity Risk.  In other words, losing money in the stock market, while taxes increase and living a long time, could have high risks once retired.

Life Insurance comes in various forms, based upon one’s protection needs:

  • Term life insurance is known as temporary life insurance.  It covers you for a specific period of time.
  • Permanent life insurance is known as cash value life insurance.  It’s used to address permanent concerns and typically covers one until death.
  • Life Insurance provides benefits that can strengthen your overall financial plan.

Long-Term Care (LTC) insurance is a “safety net” for an extended period of time:

  • The need for care may be due to cognitive or physical impairment.
  • LTC can be paid monthly, annually or in a single premium.
  • A 65-year old couple has a 70% chance of one of them needing LTC in their lifetime.

Disability Insurance (DI) is income protection that we can rely on while we are working:

  • If unable to perform one’s job duties, DI will replace a portion of their income, tax-free.
  • DI allows for the continued funding of lifestyle and retirement plans.
  • Severance disability insurance plans can be included in severance packages.

For a recent presentation on the above, please see: 

Finding a Life Insurance, Long Term Insurance or Disability Insurance Advisor that understands how to stabilize the foundation that your financial plan sits on, is key to a successful plan.

For advice on any of the above. please contact:

Nico Wiborg – (650) 465-8957  nwiborg@ft.newyorklife.com

Todd Wellnitz – (415) 846-1521  todd@wellguardfinancial.com

(The above information is for educational purposes only.  For more information on the above, please contact your financial planner, tax planner, estate planner or attorney)

Any questions on the above or lending, please contact me at:

Rob McCarthy

Senior Mortgage Advisor


408-377-4123 o  650-465-8957 c   408-608-1921 f

101 Loan – 6020 Hellyer Ave #150, San Jose, CA 95138

CA DRE #01165697  NMLS #121019


  1. Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
  2. Reverse Mortgage Financing to include Conforming, Jumbo, HELOC Jumbo’s.
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