Topeka attorney busts myths about elder law
Elder law and estate planning are poorly understood areas of the law. Thankfully, attorneys such as Scott Sexton can help people avoid financial pitfalls.
Scott gave a virtual presentation in September titled “Elder Law: Mythbusting” as part of Topeka Presbyterian Manor’s Just Ask continuing education series. A lawyer for more than 15 years, Scott owns a Topeka firm focused on long term care planning and veteran’s benefits.
According to Scott, these are some of the most common misunderstandings when it comes to estate planning and elder law:
“I’m just fine, I have a will.” A will is a set of rules that allow a probate judge to oversee the administration of your estate, but “there are simpler, easier ways to navigate the estate process,” Scott said. Wills do not circumvent the probate process, which can be costly. In fact, Scott doesn’t even have a will himself. Alternatives to wills include powers of attorney or trusts.
“I can give $15,000 to each of my kids every year with no problem.” Scott calls the common belief that recipients of larger gifts will be subject to tax an “urban legend.” Though state tax laws vary, Kansas does not impose a gift tax. Larger gifts do have to be reported to the IRS, but they are not taxed at the federal level unless they are very large; currently, the limit is $10 million annually. Penalties associated with gifts do exist, but the “gift tax” isn’t one of them.
“I’m just fine, I take my annual required minimum distribution from my IRA.” Scott says seniors who only take the RMD may be following advice they received 30 or more years ago. If more money is needed, this puts people in a position where they may have a significant tax bill. Instead, retirees should look for a “happy medium” that will minimize tax liability and provide long-term flexibility. Scott advises consulting with a tax advisor, financial planner and attorney in order to coordinate retirement distributions.
Scott also discussed issues around Medicaid, the problem with adding family members to your home deed, and how and when to give away assets.